New York Attorney Malpractice Blog

Hinshaw reports this months old case about legal fee disgorgement.  We reported on it about a month ago.  Wilson Elser, a big defense firm which handles legal malpractice defense cases, unsuccessfully defended itself on this case.

"Ulico Casualty Company (“Ulico”) is an insurer that specializes in trustee and fiduciary liability insurance. In the early 1980s Ulico entered into managing general agency agreements with Professional Indemnity Agency, Inc. and Professional Intermediary Associates, Inc. (collectively “PIA”) for PIA to serve as its underwriting agent for this book of business. As part of this agreement, the Wilson, Elser, Moskowitz, Edelman & Dicker firm would serve as claims attorneys to handle claims for coverage made by Ulico insureds, as well as provide general claims handling and oversight. The retainer in effect at the time of this controversy provided that “Wilson, Elser shall devote all the time necessary to the business of the Company, but shall not by this retainer be prevented or barred from taking other employment of a similar or other legal character by reason of the employment herein specified.” Id. at 2.

Subsequently, PIA became concerned about Ulico’s declining Best rating and business practices. PIA decided to enter an agreement to place the business with Legion Insurance Company (“Legion”). PIA hoped to move 50 percent to 75 percent of the business from Ulico to Legion. Id. at 3. Wilson, Elser advised PIA that its managing general agency agreement with Ulico was not exclusive and drafted a managing general agency agreement for use by PIA and Legion. Wilson, Elser also prepared filings necessary to obtain regulatory approvals from the state insurance departments for Legion to provide the insurance. The filings included an endorsement to permit Legion to offer more favorable coverage than Ulico and enhance Legion’s competitive position. Id. at 4. Wilson, Elser also offered advice to PIA about strategy regarding the termination of its relationship with Ulico. The court noted it was “undisputed” that in four instances, Wilson, Elser engaged in dual representation of Legion and Ulico on claims by insureds for coverage when both companies had policies that could apply. Id. at 5.

After terminating its relationship with both PIA and Wilson, Elser, Ulico filed suit against Wilson, Elser claiming breach of fiduciary duty, aiding and abetting PIA’s breach of fiduciary duty, legal malpractice, tortious interference with contract and tortious interference with prospective economic advantage. Id. at 6. Ulico moved for summary judgment on the issue of breach of fiduciary duty and for an order that Wilson, Elser return legal fees it received during the period of alleged disloyalty. Id. at 1.

The court noted that “the conflict of interest on which the fiduciary duty claim is premised did not affect Wilson Elser’s representation of Ulico in any litigation, but consisted, rather, in advancing the business interests of certain clients, PIA and Legion, to the detriment of another client, Ulico.” Id. at 10. The court found this situation presented an “egregious” breach of fiduciary duty because the attorney “fostered the business interests and advanced the competitive position of certain clients not over a former client but over a client which the attorney still represented…The undisputed facts…demonstrate that Wilson Elser did not merely assist PIA with preliminary steps to set up a competing business, but rather assisted PIA at every stage of PIA’s plan to transfer Ulico’s TFL business from Ulico to Legion.” Id. at 12.

The fact that the parties had respective expert opinions on the issue of the breach did not create an issue of fact because the existence of the duty and its breach presented questions of law for the court. Id. at 14. The breach does not require the actual use of client confidences but only the “reasonable probability” that they will be disclosed. See Jamaica Public Serv. Co. Ltd. v. AIU Ins. Co., 92 N.Y. 2d 631 (1998). In light of the fact that Wilson, Elser had been Ulico’s claim counsel for more than 10 years, it held confidential information it had acquired from Ulico regarding insureds, premiums, rates, loss experience and profitability, which would have been very useful to Legion in competing with Ulico. Ulico at 15. The court easily rejected the argument that the retainer language about the ability to take other or similar employment allowed this conduct, as it fell far short of the complete disclosure required to obtain the client’s informed consent to this conflict of interest. Id. at 16.

Finally, the court turned to appropriate damages. The court rejected Wilson, Elser’s argument that the fees subject to forfeiture should be only those for services where there was a breach of fiduciary duty. When there is a persistent pattern of disloyalty, “the cases ordinarily order forfeiture without apportioning or limiting the forfeiture to fees for services performed with disloyalty.” Id. at 21. Because the monthly fee structure between Ulico and Wilson, Elser was “tantamount” to a salary and could not be broken down by individual tasks, the court held that the forfeiture of fees should cover all regular monthly fees paid during the period of disloyalty. Id. at 22. The court ordered further proceedings to determine whether, as Ulico contended, the amount to be disgorged equaled $3,420,612.05.

Significance of Case
As a general proposition, the representation of competing businesses vis a vis third parties is permissible without conflicts waivers. Here, as elsewhere, however, the devil is in the details. Where the matters being handled for the competing businesses are as related and the interests of the clients are as plainly adverse as this court found them to be, a critical line has been crossed. And even in the absence of actual harm to a client, one of the consequences of crossing such a line can be a forfeiture of fees "

Attorneys move from firm to firm more often now than in the past.  The NYLJ and Law.Com's top articles are all about firms reconstituting themselves, and movement of lawyers from hither to yon.

Here is a case from New Jersey about a successful legal malpractice case in which plaintiff recovers from one set of defendants, but has to take an assignment of insurance rights from the second set.  The insurance carrier started to defend under a reservation of rights, and then successfully withdrew.

"The governing legal principles are firmly established. An insurance company may respond to a claim against its insured by advising the insured that it is willing to defend under a reservation of rights or "non-waiver agreement." Merchants Indem. Corp. of N.Y. v. Eggleston, 37 N.J. 114, 126 (1962); Griggs v. Bertram, 88 N.J. 347, 357 (1982). Under such an agreement, the insurance company cannot be held ultimately responsible for payments otherwise required by the insurance policy. The agreement may be "inferred from the insured's failure to reject the carrier's offer to defend with a reservation of rights." Merchants, supra, 37 N.J. at 126. But "to spell out acquiescence by silence," the reservation of rights letter "must fairly inform the insured that the offer may be accepted or rejected." Id. at 127-28.

The first judge held that the letter in question failed the test set out in Merchants because it did not literally say you may "accept or reject" the offered defense. But the case does not stand for the proposition that its exact words have to be employed. Here, the letter "specifically disclaimed[ed] coverage for any . . . alleged act, error, or omission that occurred prior to the policy's retroactive date" and for any member of RRMKK. The letter did not in any way reflect or even suggest a unilateral decision by Harleysville"

"An example of an improper unilateral declaration by an insurance company of its intention to defend while reserving the right to disclaim appears in Sneed v. Concord Insurance Co., 98 N.J. Super. 306, 314 (App. Div. 1967)(the company "'will continue to investigate this matter, but reserves any and all of its rights under the policy contract and may at any time, disclaim liability thereunder'"). By contrast, the language used by Harleysville comports with the reservation of rights letters sustained in Neilson v. American Mutual Liability Insurance Co. of Boston, 111 N. J. L. 345, 349 (E.& A. 1933)("'If this is not agreeable to you, we will return the summons and complaint for such action as you think advisable.'"). We perceive no difference between that statement and Harleysville's statement that it was "prepared" to defend "if" the insureds were willing "to accept the reservation," particularly when the letter expressly declined coverage for the only period of time during which the insureds could have had responsibility for Kuhn's actions and suggested that they might want "to retain personal counsel to protect their uninsured interests." In short, because Rubin and Kaplan had been properly notified of the reservation of rights and had not suffered any prejudice from the timing of Harleysville's withdrawl, they had no enforceable claim to the benefits of the malpractice insurance policy.

Relying primarily on Merchants and Griggs, the Scottos and Rubin and Kaplan argue that even if the reservation of rights letter effectively preserved Harleysville's rights, there is liability nevertheless because Harleysville did not disclaim for over three years and finally disclaimed while the malpractice case was still pending. Both of those cases are distinguishable because they involve untimely reservation of rights letters, which is not the case here. While those cases would be pertinent by inference if Rubin and Kaplan had suffered prejudice because of the timing of Harleysville's withdrawal, there was no prejudice here since the "settlement" required nothing of Rubin and Kaplan other than an assignment of rights. "

This woman was the victim of a rape and assault in a housing complex, due to lax security.  Attorneys hired to sue the building didn't show up for trial.  Now she has settled the legal malpractice case against the attorneys.

The Appellate Division, Second Department recognized that there had been potential legal malpractice in the way this law firm handled equitable distribution in this case, and its failure to protect its client.  Wife was client, husband had real property, and due to a failure to file a lis pendens, the real property became part of his bankruptcy estate, rather than the clients. 

"The Firm's contention that it did not depart from the ordinary standard of care applicable to an attorney in a matrimonial action involves factual issues not properly resolved in the context of a motion to dismiss or for leave to amend (see Ehlinger v Ruberti, Girvin & Ferlazzo, 304 AD2d 925). Moreoever, the Firm did not demonstrate that notices of pendency could not have been filed pursuant to CPLR 6501 in the underlying divorce action, since Hirsch not only asserted a claim for equitable distribution pursuant to Domestic Relations Law § 234, but also asserted fraudulent conveyance and constructive trust causes of action which demanded judgment that would affect title to the properties, and successfully sought issuance of a temporary restraining order and the appointment of a receiver to manage all of the properties at issue (see Ehlinger v Ruberti, Girvin & Ferlazzo, supra; Resnick v Doukas, 261 AD2d 375; Elghanayan v Elghanayan, 102 AD2d 803; Leibowits v Leibowits, 93 AD2d 535, 556; cf. Sehgal v Sehgal, 220 AD2d 201; Fakiris v Fakiris, 177 AD2d 540). "

At this stage of the proceedings, Hirsch need not establish actual damages, but is only required to set forth allegations from which damages attributable to the defendant's alleged malpractice might be reasonably inferred (see Kempf v Magida, 37 AD3d 763; InKine Pharm. Co. v Coleman, 305 AD2d 151). The proposed amended pleading met this standard by alleging that the filing of a notice of pendency would have provided constructive notice of Hirsch's claims in the divorce action and thereby prevented the eight properties from becoming part of the estates in bankruptcy of the Trust Entities and/or of Hirsch's former husband (see CPLR 6501; 11 USC 544[a]; Goldstein v Gold, 106 AD2d 100, 102, affd 66 NY2d 624; In re Borison, 226 BR 779, 787-788; In re Eadie Properties, Inc., 31 BR 812, 814-815). As the Firm did not demonstrate that these allegations are palpably insufficient as a matter of fact or law, leave to amend the counterclaim [*3]should have been granted and the motion to dismiss denied.

It seems that everyone involved in this case of suspected child abuse did the correct thing, which was to report the suspected behavior.  All were sued, and all gained dismissal. The case.

.KAPLAN V. PUCKETT (2006-SC-18-DG)

Here is a legal malpractice case from Kentucky, with briefs.

"Legal malpractice. Puckett was found guilty of arson-related murder. Puckett was acquitted at new trial granted because prosecution witness had withheld exculpatory evidence at first trial. Puckett subsequently prevailed in legal malpractice action against original defense counsel. The issue is whether the malpractice verdict may stand in light of the withheld evidence."
Discretionary review granted 8/17/2006
Jefferson Circuit Court, Judge F. Kenneth Conliffe
For Movant: George R. Carter
For Respondent: Bill V. Seiller

Appellant’s Brief
Appellee’s Brief
Appellant’s Reply Brief
COA OPINION: 2004-CA-001750 (PDF)

This attorney prosecuted class actions for big settlements.  Now his millions in fees is in jepordy, based on the allocation of expenses between the groups of clients. The Story.

"Three former clients of trial lawyer John O'Quinn could be receiving millions of dollars back after an arbitration panel ruled the prominent Houston attorney improperly deducted expenses from settlements he won for them.

The three-person panel could decide this month if O'Quinn would have to give back any money. O'Quinn could be forced to return the $18.9 million in expenses plus all of his fees, estimated to be $580 million.

A March panel decision obtained by the Houston Chronicle showed a majority thought the deduction of a total of $18.9 million from the plaintiffs' settlements was improper. The decision also said the 1.5 percent of general expenses collected by O'Quinn from the women were not authorized by his client contracts. "

Baker Donnelson reports that the US Supreme Court has issued a ruling in Bell Atlantic Corp. v. Twombly an anti-trust case which may revolutionize pleading in all civil cases. 

"In an antitrust case decided on May 21, 2007, the United States Supreme Court abandoned a fifty-year-old liberal pleading rule in favor of a significantly tougher standard applicable to all civil cases that may make it more difficult for plaintiffs to sue and easier for defendants to end lawsuits early, avoiding expensive litigation. The Court's rejection of the old standard is unequivocal: the court's old formulation, quoted for half a century in numerous opinions of the Supreme Court and the lower courts, "is best forgotten as an incomplete, negative gloss on an accepted pleading standard."

THEIR CONCLUSION?\

"For fifty years, courts have evaluated all civil complaints under the standard set forth in Conley v. Gibson, 355 U.S. 42 (1957), which allowed cases to proceed through the process of pre-trial discovery unless, based on the claims alleged in the complaint, the plaintiff could prove "no set of facts in support of his claim which would entitle him to relief." This meant that under Conley, a case brought under the labor and employment laws, a plaintiff needed only to make allegations that put defendants on notice of what the plaintiff's claims were without asserting all of the facts that supported the plaintiff's conclusion that the law had been violated. As long as some set of facts might exist to support the plaintiff's conclusions, the case could go forward. But in Twombly, the Supreme Court rejected this standard, noting that it has "earned its retirement."

The Supreme Court's new standard asks not whether it is conceivable that some set of facts could be developed to support the allegations in the complaint, but rather whether the plaintiff has stated enough facts in the complaint to allow a court to conclude that it is plausible that the plaintiff is entitled to relief. Thus, defendants can avoid the costs and burden of responding to a complaint and to a plaintiff's request for discovery by convincing the judge that the plaintiff's claims are implausible even if they might be remotely possible. Conley was not an antitrust case, and the Court's rejection of Conley was not limited to antitrust cases. It is likely, therefore, that this new pleading standard will be adopted in civil cases generally. "

A sometimes defense in legal malpractice is "preemption."  The defense would be that regular rules of legal malpractice do not apply because a federal or state law has so occupied the field, that its rules take over.

Here is a short blurb about ERISA not preempting the field for a legal malpractice case.

Here is a blog blurb from an Indiana Case:

"In Norman R. Carlson, Jr., et al v. Sweeney, Dabagia, Donoghue, Thorne, James & Pagos, et al, a 28-page opinion dealing with questions of alleged attorney malpractice in will drafting, Judge Robb writes:

Norman R. Carlson, Jr., individually, and as executor of the estates of Norman R. Carlson and Hilda D. Carlson, and as Trustee of the Trust established under the last wills and testaments of Norman Sr. and Hilda, Margaret Ann Carlson, Beth Carlson Montigue, and David R. Carlson, (when referred to collectively, the “Carlsons”), filed a complaint against the law firm of Sweeney, Dabagia, Donoghue, Thorne, Janes and Pagos, and lawyer John H. Sweeney (the “Lawyers”), alleging legal malpractice that resulted in adverse tax consequences. The Lawyers filed a motion for summary judgment, raising two issues. The trial court denied the Lawyers’ motion as to one issue, but granted it as to the other. The Carlsons now appeal, raising a single issue, which we restate as whether the trial court properly granted summary judgment based on its determination that reformations to the Wills drafted by the Lawyers effectively eliminated any malpractice that occurred relating to the drafting of the original Wills. On cross-appeal, the Lawyers raise a single issue, which we restate as whether the trial court properly denied its motion for summary judgment on the grounds that the original Wills would result in adverse tax consequences. The Lawyers also raise the following issues: 1) whether the “substantial adverse interest exception” protects the Carlsons from adverse tax consequences; 2) whether the Carlsons have brought this suit too early, as the IRS has not yet assigned a tax penalty; and 3) whether the trial court improperly considered the opinion of an attorney hired by the Carlsons. We conclude the adverse interest exception does not protect the Carlsons, the Carlsons are not precluded from bringing their suit at this time, and that the Lawyers waived their argument relating to the opinion of the expert witness by not raising it before the trial court. We further conclude that the trial court properly found that the original Wills would result in adverse tax consequences, and affirm the trial court’s denial of the Lawyers’ motion for summary judgment on that issue. However, we conclude that the reformations did not effectively avoid potential adverse tax consequences, reverse the trial court’s grant of summary judgment on that issue, and remand for further proceedings. * * *

Conclusion We conclude that the trial court properly determined that the original Wills did not establish an ascertainable standard regarding a Trustee’s ability to invade the trust corpus; that the “adverse interest” clause does not protect the Trust from tax liability; and that the Carlsons did not bring this suit prematurely. Therefore, we affirm the trial court’s denial of the summary judgment motion on these grounds. We also conclude that the reformations did not comport with Indiana law, and that the trial court therefore improperly granted summary judgment. We therefore reverse the trial courts grant of summary judgment and remand for further proceedings."

AVVO a new lawyer search web site is up and  running. "a online legal services startup led by Expedia veteran Mark Britton, is unveiling its website after more than a year of development.

Avvo.com allows consumers to search for lawyers by name, practice area, or location and get ratings and profiles for them. The website is free to consumers and supported by online advertising.

Each lawyer's profile includes license status, disciplinary sanctions, practice areas, education, a list of awards and publications, as well as client ratings and peer endorsements. The site gives lawyers an overall rating based on their experience and record.

Avvo collects its information from public sources including courts, state bar associations and law firm websites. Client ratings and peer endorsements are submitted by visitors to the site.

Avvo is the brainchild of Britton, who previously served as general counsel at Bellevue online travel site Expedia Inc. (NASDAQ: EXPE). "

Yes, it is still good in Legal Malpractice, and Yes it is still good in Medical Malpractice, but the Court of Appeals took a big, big step yesterday, and ruled that it was not applicable to accountants filing yearly tax returns, or yearly accountings.  PriceWaterhouse won the case, and  Judge Theodore Jones wrote the decision.Law.Com reports on the decision:

"The doctrine of continuous representation cannot be invoked in situations where accountants are providing "separate and discrete" annual audits to clients and not more extensive accounting services, the State of New York Court of Appeals ruled unanimously Thursday.

The decision in Williamson v. PricewaterhouseCoopers LLP , 64, had been anxiously awaited in the accounting industry since the Appellate Division, 1st Department, ruled last year that PricewaterhouseCoopers had a continuous relationship with two failed hedge funds it audited annually.

This was the first time the court weighed in on the continuous representation doctrine in an accounting context. The opinion was written by Judge Theodore T. Jones. "
In deciding that PricewaterhouseCoopers did not have a continuous representation relationship with the hedge funds, Lipper Convertible and the Lipper Fixed Income Fund, the court relieved PricewaterhouseCoopers of malpractice liability for the five years, from 1995 to 1999, it audited the funds' year-end financial statements and declared them a reasonable indication of the funds' financial positions.

Missing Documents can be a lawyer's nightmare.  Here is a follow up on the Qualcom story from American lawyer:

"A week after the public learned of Qualcomm Inc.'s bombshell admission that it withheld potentially thousands of important documents in a high-stakes patent trial against Broadcom Corp., many in the intellectual property community are still buzzing about the gaffe.

The case is even more striking because the attorney who has publicly apologized for Qualcomm's error has a strong reputation in his field, as does his firm. Yet several attorneys say it's still too early to assign blame for the error.

"Whenever there are accusations of concealment of evidence and they prove to be true, there definitely is going to be harm to the lawyers and the parties," said Anup Tikku, an IP associate with Kirkpatrick & Lockhart Preston Gates Ellis, who has followed the case closely. "What I find difficult to understand is how Qualcomm interviewed witnesses, put them on the stand and did not realize these documents existed."

Ross Todd at the American Lawyerwrites:

"San Diego City Attorney Michael Aguirre, who has already led the city's charge to sue two Am Law 100 firms, has a third in his sights. In an April report, Aguirre recommended that the city take legal action against Willkie Farr & Gallagher because of what Aguirre called a "failed" investigation into the city's $1.4 billion understatement of its pension debt. Aguirre says that Willkie Farr overbilled the city and produced a report that was "a mile wide and an inch deep."

Willkie Farr partner Michael Young, responding to requests for comment on behalf of himself and partner Benito Romano, said, "We are not going to express our views on the matter."

The San Diego pension scandal has given rise to multiple lawsuits. In late 2005 the city sued long-time bond counsel Orrick, Herrington & Sutcliffe, among other advisers, claiming that the firm knowingly approved inaccurate financial disclosures. Then, in July 2006, the city sued Vinson & Elkins, alleging that V&E ran up a $6 million bill while conducting a flawed investigation of the pension fiasco. Both cases are moving toward discovery, according to Dan Stanford of San Diego's Stanford and Associates, the city's outside counsel in each case. "

Bad faith litigation is usually a situation where the case could be settled within the policy limits, but that chance is lost and the verdict exceeds the policy limits.  Here is the inverse.  The carrier settles a case within the policy limits but the insured [in this case a doctor] did not want to settle, and sues the carrier for settling in bad faith.

"A Florida appellate court has recognized a new statutory bad faith cause of action in medical malpractice claims. In Rogers v. Chicago Ins. Co.,1 the fourth district court of appeal held that an insured has a private cause of action under section 627.4147, Florida Statutes, which requires that settlement offers be made in good faith and in the best interests of the insured.

In Rogers, a medical doctor sued his professional liability insurer for failing to properly investigate the malpractice claim filed against him, as required by section 766.106,2 Florida Statutes. He alleged that the insurer had acted in bad faith under section 627.4147 by settling a completely defensible claim, causing him damages such as his inability to obtain medical malpractice insurance, which limited his practice.

In 1985, the Florida Legislature enacted section 627.4147, titled “Medical malpractice insurance contracts.” Subsection 627.4147(1)(b) provides that it is against public policy for any insurance policy to contain a clause giving the insured the exclusive right to veto a settlement offer within the policy limits. It also provides that “any offer of admission of liability, settlement offer, or offer of judgment made by an insurer or self-insurer shall be made in good faith and in the best interests of the insured.”

Will this principal spread to legal malpractice?

Its bad enough when an attorney makes mistakes which cost the client.  Here, its not even an attorney!  The NY TImes Story:

"A Long Island man who worked as a lawyer at a major New York law firm for four years — even though, prosecutors said, he had never gone to law school — pleaded not guilty yesterday in State Supreme Court to charges of impersonating a lawyer and stealing at least $284,350 in salary from his firm."

This report from Hinshaw discusses a Georgia case in which an attorney did not file a verification in an anti-SLAPP suit.  It was a mistake, but the question of whether he had to file a verification was "unsettled."  So far, [summary judgment denied], the client's legal malpractice case remains viable.  Moral ?  Advise the client of unsettled law .

"Chatham Orthopaedic Surgery Center, LLC., et al. v. White, 640 S.E.2d 633 (Ga. Ct. App. 2006)

Brief Summary
The court upheld summary judgment in favor of an attorney on the issue of negligence in failing to file a necessary verification under an anti-SLAPP statute because prior case law was unclear at the time. Nonetheless, the court reversed summary judgment in the attorney’s favor on a separate claim to the effect that the attorney was negligent in not advising his client of the risk of not filing a verification in light of the unsettled state of the law. "

General Obligation Law Sec. 15-108 has long been a trap and a well known trap at that.  Settle with one defendant, and the rest of them get to try their case against an empty seat, and get the greater of the settlement amount or the equitable share of the settling defendant.

But, as of Today new legislation changes all of that!

CHAPTER TEXT:
LAWS OF NEW YORK, 2007

CHAPTER 70

AN ACT to amend the general obligations law, in relation to the impact
of litigation settlements upon the remaining parties to the action

Became a law June 4, 2007, with the approval of the Governor.
Passed by a majority vote, three-fifths being present.

The People of the State of New York, represented in Senate and Assem-
bly, do enact as follows:

Section 1. Section 15-108 of the general obligations law is amended by
adding a new subdivision (d) to read as follows:
(d) Releases and covenants within the scope of this section. A release
or a covenant not to sue between a plaintiff or claimant and a person
who is liable or claimed to be liable in tort shall be deemed a release
or covenant for the purposes of this section only if:
(1) the plaintiff or claimant receives, as part of the agreement,
monetary consideration greater than one dollar;
(2) the release or covenant completely or substantially terminates the
dispute between the plaintiff or claimant and the person who was claimed
to be liable; and
(3) such release or covenant is provided prior to entry of judgment.
§ 2. This act shall take effect on the thirtieth day after it shall
have become a law and shall apply to all releases or covenants not to
sue effective on or after such effective date.

Here is the sponsor's memo:

"SPONSORS MEMO:NEW YORK STATE SENATEINTRODUCER'S MEMORANDUM IN SUPPORTsubmitted in accordance with Senate Rule VI. Sec 1
BILL NUMBER: S3739

SPONSOR: DEFRANCISCO

TITLE OF BILL: An act to amend the general obligations law, in
relation to the impact of litigation settlements upon the remaining
parties to the action

This measure, a predecessor of which the Legislature passed in 2006, is
one in a series of measures being introduced at the request of the Chief
Administrative Judge on the recommendation of his Advisory Committee on
Civil Practice. The 2006 measure contained a technical defect that
required its disapproval (see Veto #259-2006). This current draft
corrects that technical defect.

This measure would amend section 15-108 of the General Obligations Law
("G.O.L.") to exclude certain releases from its scope, most importantly
including those instances in which the plaintiff voluntarily discontin-
ues his or her suit against a particular defendant without receiving any
monetary consideration for that release. This would encourage plaintiffs
to voluntarily release those defendants who appear not to bear any
liability, which would in turn reduce the litigation costs of those
ostensibly blameless defendants. The amendment would also make many
summary judgment motions unnecessary, and would thus reduce the burden
on the court system.

Section 15-108 of the G.O.L prescribes the consequences which ensue when
a tort plaintiff releases from liability one or more, but fewer than
all, of the alleged tortfeasors. In broad strokes, current G.O.L.
§15-108 applies when a plaintiff settles with a "tortfeasor" (usually,
but not invariably, a defendant). In such event, current subdivisions
(b) and (c) provide that the settling tortfeasor can neither seek
contribution from the other tortfeasors nor be held liable for contrib-
utions to the others, the underlying theory being that the settlor has
brought his or her peace. The settling tortfeasor can, however, seek
indemnification from the other tortfeasors, and may also be sued there-
for.

A significant issue arises when, during the course of discovery, it
appears that a defendant whom plaintiff initially thought might bear
some liability was, in fact, blameless. Because the plaintiff and
plaintiff's counsel generally do not want superfluous parties that must
be served with every single document and consulted about court dates and
deadlines, the plaintiff would generally like to give such a defendant
his or her "walking papers." Of course, that is also what the ostensibly
blameless defendant would like - - to be released immediately and with-
out incurring any further attorney's fees. It is also what the court
system would prefer to happen.

There is, however, a problem. If the plaintiff were to release the
apparently blameless defendant, and if one of the remaining defendants
were to prove at trial that the released defendant was indeed partially
at fault for the plaintiff's damages, then the defendants still left in
the case would be entitled to a reduction of their liability. See

KILLEEN V. REINHARDT, 71 A.D.2d 851,419 N.Y.S.2d 175 (2nd Dept. 1979).
In that case, the plaintiff's magnanimous discontinuance would result in
a reduction of the plaintiff's damages, and in under compensation. Such
a reduction, which in theory could amount to a significant percentage of
plaintiff's economic and non-economic loss, could occur even though the
plaintiff did not receive any consideration for the discontinuance, and
it could occur even if none of the facts or claims establishing the
culpability of the released defendant had been asserted, or known, when
plaintiff discontinued.

This feature of G.O.L. §15-108 may be a trap to those unfamiliar with
the statute, but it is well known to experienced plaintiff's counsel.
Their reaction is precisely what one would expect. Knowing that a volun-
tary discontinuance can cost the plaintiff thousands or even millions of
dollars if new facts and new theories point the finger of blame at the
released defendant, and also knowing that there is no risk of any such
penalty if the ostensibly blameless defendant instead moves for and
receives summary judgment from the court, the plaintiff's attorney will
typically answer a request for a discontinuance by saying, to extricate
yourself, you must make a summary judgment motion.

In this situation in which an ostensibly blameless defendant seeks to
drop out of the lawsuit, the other defendants might not mind if that
occurs. . . provided that they, the other defendants, can commence their
own third-party claims if and when it seems wise to do so, for they too
are concerned that a defendant who now appears blameless may later
appear to bear some responsibility. The problem, from their perspective,
is that they will not be allowed that choice. If plaintiff discontinues
against the ostensibly blameless defendant, then, per the current stat-
ute, that defendant cannot be sued for contribution. And if the osten-
sibly blameless defendant moves for and receives summary judgment, then
that defendant is forever free from liability. . . no matter what turns
up later on. For these reasons, the remaining defendants are virtually
forced to oppose the summary judgment motion, even if they would have
preferred to provisionally allow the movant to leave, so long as there
is any arguable basis for opposition.

Thus, what might have been a consensual discontinuance instead becomes a
contested motion, and, perhaps, after the motion is resolved, a
contested appeal.

The proposed amendment would eliminate three kinds of releases from the
statute's scope, but only two of the exclusions constitute changes as
compared to current law.

First and foremost, discontinuances given without monetary consideration
would be removed from the statute's scope, meaning that a plaintiff
could discontinue without risk of being penalized for doing so. This
would help the ostensibly blameless defendants to get out of the case as
quickly and as inexpensively as possible. It should be noted that, in
an instance in which the plaintiff initially sued and thereafter
released an individual or corporate entity without monetary consider-
ation for the release, the remaining defendants' rights against that
released individual would be exactly the same as if the individual had
never been sued in the first place. More specifically, the remaining
defendants would have the same rights that they would have initially had
to implead the individual and thereby seek contribution or indemnity or
to instead seek a CPLR Article 16 set-off by reason of the individual's
culpability. Of course, under the terms of Article 16, the Article 16
set-off would apply only to the plaintiff's non-economic loss, and then
only if the party seeking the set-off was assigned 50% or less of the
culpability.

Second, by limiting the statute to those releases that "completely or
substantially" terminate the dispute against the released defendant, the
new subdivision would effectively exclude "high- low" agreements in
which the parties agree to confine the damages to an agreed range. The
subdivision would also effectively exclude agreements in which the
parties merely narrow the issues (perhaps, by conceding liability, or
jurisdiction) without fully resolving the action.

The exclusion of high-low agreements constitutes a change, although the
current rule is not well-settled. The exclusion of other issue narrowing
agreements may or may not constitute a change; the current rule is not
clear enough to say. In any event, the "completely or substantially
terminates" limitation is not the main point of the amendment, and is
not likely to have as pronounced an impact as the "greater than one
dollar" limitation. However, the Committee advocates the "completely or
substantially terminates" provision because there is no policy reason
why issue-narrowing agreements should be deterred or why such agreements
should engender windfall consequences for the other parties.

The exclusion of post-judgment settlements would be a codification of
current law. The Court of Appeals long ago ruled that the statute does
not apply to post-judgment settlements, and that rule has never been
seriously questioned since then. The proposal codifies that rule because
(1) the rule sensibly allows the plaintiff to accept a partial payment
from one defendant who may have no other assets except for his or her
personal possessions, and to do so without unintentionally releasing the
other defendants, and (2) adoption of a new, statutory exclusion that
did not expressly recognize the existent, common-law exclusion could
conceivably be construed as a rejection of it.

This measure, which would have no fiscal impact on the State, would take
effect 30 days after such time as it shall have become law, and it shall
apply to all releases or covenants not to sue effected on or after such
effective date. "

Proving mistakes by an attorney is really the least difficult aspect of litigating a legal malpractice case.  Technical aspects of the action, such as timelyness, pleading, proximate cause, and privity often overshadow a simple analysis of mistakes.

Here is a case from Michigan in which the attorney filed a divorce action in the wrong county!  Howver, plaintiff could not demonstrate damages.  They tried gamely to show that the plaintniff had to rent an apartment in the next county, and had to spend money to move around.  Result?  No damages.

Often, a losing criminal defense attorney will. because they are usually really sympathetic guys, go to bat for a client by allowing the client to 'give them up."  This usually comes up at an ineffective counsel application by the defendant.  Here is a prime example:

"A defense attorney tried a different argument for why his convicted client should be given a new murder trial: the attorney was too sleepy.

Charles R. Curbo wrote in a motion for a new trial that he could not properly represent the defendant, Tony Wolfe, because he was tired during the six-day trial in January.

"The court constantly rushed defense counsel, who the court knew had little sleep on account of the hours that the court was keeping for no good reason," Curbo wrote.

But Assistant District Attorney General David Zak, who prosecuted the case, said he saw no lack of enthusiasm from the defense.

"I saw no change in legal ability from Monday to Saturday," Zak said. "The defense attorney showed anger, passion and zeal in representing his client. There was never a moment when he was running out of gas."

Wolfe was convicted of first-degree murder for shooting 27-year-old Leondus Hawkins in September 2004 at a service station parking lot. He was sentenced to life in prison.

But both sides said the trial held long and late hours due to the defendant's medical condition and because the judge wanted to send the sequestered jury home as quickly as possible.

Wolfe required dialysis treatments every other morning and kept the trial from starting until early afternoon for some days. The proceedings went on until 10 or 11 p.m. on some days.

"My client is already worn out from dialysis and they make him stay up there until 11 at night and he can't remember his name hardly," Curbo said.

Attorney 1 started a trip and fall case against City and Contractor A.  After two years he was substituted out, and Attorney 2 started a new action against Contractor B.  The two actions were consolidated and eventually Contractor A won the case.  Contractor B paid $ 100,000 and the City paid $ 50,000.

Is Attorney 1 entitled to fees?  Is Attorney 2 entitled to Fees? 

"The motion, by order to show cause, of plaintiffs' attorney, Theodore Oshman, Esq., of Oshman & Mirisola, LLP (hereinafter "movants") [Attorney 2] for an order restoring this matter to the active calendar, allowing plaintiffs' counsel to deposit all proceeds in its escrow account to allow for the distribution of funds to the plaintiffs and setting this matter down for a hearing on the issue of attorney's fees, is granted.

The cross-motion by plaintiffs' former attorney, Barry S. Gedan, Esq., {Attorney 1]  for an order disqualifying plaintiffs' current attorneys from receiving any attorneys' fee in this action upon grounds of misconduct by them, requiring the plaintiffs' current attorneys to refund to the plaintiffs their entire claimed contingent attorneys' fee plus disbursements, declaring that the entire portion of the settlement proceeds, in the amount of $50,000, be paid by defendant, The City of New York (hereinafter "City"), Barry S. Gedan, Esq., or in the alternative, requiring that the City deposit the $50,000 settlement in this action in an interest bearing account at Mr. Gedan's bank, requiring the movant to provide a detailed list of the legal services it provided on behalf of the plaintiffs and requiring that the movant provide Mr. Gedan with a copy of the file in this case, is denied in its entirety.
Mr. Gedan is entitled to recover in quantum meruit, " . . . the fair and reasonable value of the services rendered . . . " Lai Ling Cheng v. Modansky Leasing Co., Inc., 73 N.Y.2d 454 (1989); Judiciary Law §475. However, Mr. Gedan is entitled to recover for services rendered to the plaintiffs in the initial action involving the City only. In Cataldo v. Budget Rent A Car Corp., 226 A.D.2d 574 (2nd Dept. 1996), the court stated, " . . . before an attorney can be granted a lien pursuant to Judiciary Law §475 he or she must have appeared for the client by 'participating in a legal proceeding on the client's behalf or by having his [or her] name affixed to the pleadings, motions, records, briefs, or other papers submitted in the matter'" (citations omitted). Mr. Gedan did not represent the plaintiffs in the action against Columbus and he has failed to demonstrate that any of the work he performed resulted in the lawsuit against Columbus. He has not demonstrated that he is entitled to any fees from the settlement in the action involving Columbus as he did not commence the action against Columbus and had no involvement in that action whatsoever.

Accordingly, Mr. Gedan is only entitled to recover for services rendered in the initial action involving the City. Movants are permitted to deposit the proceeds of the settlement involving the City in its escrow account pending a determination of the fees Mr. Gedan is entitled to receive. Moreover, movant is permitted to distribute the plaintiffs' share of the funds. Plaintiff, Melia Rothfeder is now more than eighty-four (84) years of age and is entitled to her share of the funds without having to wait for a determination in the fee dispute involving her present and former attorneys. "

Attorney Harry H. Kutner, Jr. had fees overdue and he was waiting for the client to pay.  Sound familiar?  Today's NYLJ , written by Daniel Wise reports:

"The retainer agreement, drafted by Mr. Kutner, gave Mr. Antonacci 15 days from the time a bill was sent out to make payment without being assessed interest.

In the event payment was not made within 15 days, the agreement explained that a 16 percent interest rate would be assessed to "encourage your prompt raising of any disputed time or services billed" and "to prevent an outstanding balance from being a source of friction between you and me, thereby protecting the fragile attorney-client trust arrangement."

In the agreement, Mr. Kutner also explained that he was charging 16 percent interest because, otherwise, in effect, he would be subsidizing a loan to Mr. Antonacci who would have had to pay at least 16 percent to borrow the funds on his credit card. "

"A requirement in a retainer agreement compelling a client to pay 16 percent interest on unpaid fees is excessive and unenforceable, a Nassau judge has ruled.

Instead, the client must pay interest on the unpaid fees at a rate of 9 percent, the amount of interest allowed by statute to be collected, both pre- and post-judgment, on amounts found collectible by courts, District Court Judge Gary F. Knobel ruled in Kutner v. Antonacci, 36363/06. [subscription]

When an attorney represents a soon-to-be testator, and there are problems after death, several principles of legal malpractice law arise: privity, statute of limitations, proximate cause.  Here is a NJ case which discusses several of the issues and gives a well written account of how the principles play out. 

Plaintiff is a surviving child, and is joined by her two sisters.  Result is that the estate may have a cause of action, and one sister may have an individual cause of action, but that the two remaining sisters lose.

"Given the wording of the agreement prepared by defendants, Clara may have had a reasonable expectation of representation as an "individual" as well as executrix. Cf. President v. Jenkins, 180 N.J. 550, 562-63 (2004) (insurance policy); Schor v. FMS Financial Corp., 357 N.J. Super. 185, 193-94 (App. Div. 2002) (need for extrinsic evidence). Defendants do not claim they expressly advised her that their representation was limited to her duties and responsibilities as executrix, irrespective of the impact on her as an individual or tax consequences to her personally, and thus it could have been "reasonable" for her to have so understood the retainer. See Restatement (Third) of the Law Governing Lawyers, § 19 (2000); id. at § 19 cmt. c. See also R.P.C. 1.2(c). Moreover, as the Restatement now confirms,

In trusts and estates practice a lawyer may have to clarify with those involved whether a trust, a trustee, its beneficiaries or groupings of some or all of them are clients and similarly whether the client is an executor, an estate, or its beneficiaries. In the absence of clarification the inference to be drawn may depend on the circumstances and the law of the jurisdiction.

[Restatement, supra, § 14 cmt. f.]

See also American College of Trust and Estate Counsel, ACTEC Commentaries on the Model Rules of Professional Conduct, Commentary on MRPC 1.2 (3d ed. 1999). Defendants had an obligation to define the scope of their representation of Clara more clearly. Accordingly, we reverse the grant of summary judgment as to Clara.

B.

The claim of Clara's sisters requires a different evaluation. As such, it must be asked if the "non-clients will rely on the attorneys' representations and the non-clients are not too remote from the attorneys to be entitled to protection." Petrillo, supra, 139 N.J. at 483-84; see also Stewart, supra, 142 N.J. Super. at 593. The non-clients in this case are beneficiaries, and the tax burden affected them individually, if not differently. In deciding the issue before us, the overarching inquiry "involves a weighing of the relationship of the parties, the nature of the risk, and the public interest in the proposed solution." Estate of Fitzgerald, supra, 336 N.J. Super. at 468 (quoting Barner, supra, 292 N.J. Super. at 261 (quoting Goldberg v. Hous. Auth. of Newark, 38 N.J. 578, 583 (1962))). See also Banco Popular N. Am. v. Gandi, 184 N.J. 161, 179-81 (2005); Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 439 (1993); Restatement, supra, §§ 51, 56 cmt. c. As such, we must consider whether the beneficiaries' interest is adverse to the testator's intent or the interest of the Estate and what the reasonable expectation of the sisters may have been.

Plaintiffs contend that "Lolio was certainly aware of the identity of the two other beneficiaries" and that the beneficiaries' "familial relationship to the executrix . . . is certainly not 'too remote' to absolve [him] from liability for deviations from accepted standards of legal practice[.]" They further assert that Clara "certainly invited her two sisters to rely upon Mr. Lolio's opinion and actions in assisting [Clara] in settling their deceased mother's estate[,]" and that Clara "owed a fiduciary duty to her two sisters of which Mr. Lolio was certainly aware, and his failure to advise that the use of the IRA moneys to pay federal estate taxes exposed Clara Heffernan to liability for breach of her fiduciary duties . . . ."

The winner of the Anna Nicole Smith lottery, who won in part because of his attorney, is now suing her to avoid a $ 600,000 legal bill.  Details.

"Anna Nicole Smith's ex-boyfriend filed a lawsuit Friday against the celebrity attorney who helped him prove he is the father of Smith's baby daughter.

Larry Birkhead's lawsuit, filed in Los Angeles Superior Court, comes three days after lawyer Debra A. Opri filed papers seeking to force him into arbitration to resolve her $620,000 legal bill.

Birkhead's lawsuit alleges legal malpractice, breach of fiduciary duty, conversion and fraud.

Birkhead maintains he is owed $885,000 paid to him by NBC Universal that Opri allegedly placed in a trust account.

He also claims Opri disparaged Smith in the media and attended her funeral despite Birkhead's objections, and that she leaked confidential information to an MSNBC reporter against his wishes as a payback to the reporter for referring Birkhead to her as a client.

According the lawsuit, Opri initially told Birkhead she was a believer in the rights of fathers and would not charge for her services because the case would benefit her legal career. He later paid her $20,000 that she told him were costs associated with the paternity litigation.

Opri, through her spokesman, James C. Levesque, issued a general statement Friday claiming "Mr. Birkhead continues to release misleading information to the media that skirts the issue of his unpaid legal fees."

In addition to the television deal, Birkhead has received millions of dollars from selling photos of his daughter, making him capable of paying his overdue legal fees, according to the statement.

A hearing on Opri's attempt to compel arbitration is set for July 9, according to the statement. "

We reported on this case a week ago, but here is another take on the issue of PA Appeals and vagueness:

"A Pennsylvania Superior Court panel has affirmed the dismissal of a legal malpractice action brought against Fox Rothschild by two brothers who claimed the firm's handling of a family will left their inheritance lighter than it should have been.

However, the majority in Hess v. Fox Rothschild ruled that Philadelphia Common Pleas Judge Annette M. Rizzo had been wrong to reject the brothers' appeal as too vaguely worded.

The case sheds light on a rare theme in the ongoing Pennsylvania Rule of Appellate Procedure 1925(b) saga.

Typically, state court judges have used that appellate procedural rule to bounce an appeal if the appellate statement was too long and/or raised too many issues.

But the rule also directed attorneys not to make their statements overly vague, and a number of appeals were quashed under that provision of the rule.

When the justices approved amendments to Rule 1925 earlier this month, they prospectively precluded judges from nixing an appeal solely because of the number of issues raised. That measure was likely in response to practitioners' gripes that appeals in complex or high-stakes cases might necessarily involve dozens of issues.

But the high court also added new language to the rule that will permit civil litigation appellants to attach to their 1925(b) statements a preface explaining the statement has been phrased in general terms because the appellants don't believe they can "readily discern the basis" for trial judges' decisions. "

Here is a NJ case on legal malpractice insurance coverage for retired partners who continue handling certain matters.

"Thanks to ambiguous and vague policy language, a professional liability carrier will have to cover a law firm partner for malpractice allegedly committed after he left an insured firm, a New Jersey appeals court says.

The judges ruled on May 25 that where a policy limited coverage for a firm's retired partners but not for partners who still practiced law and handled cases referred by the firm, the policy would be read against the carrier, Zurich Specialties London Limited.

"Zurich could have utilized policy language that would have eliminated all ambiguity and which would have put the matter beyond all reasonable question," the judges wrote in Jolley v. Marquess, A-4513-0. "Zurich did not do so; therefore, we construe the ambiguity in favor of coverage, which is the approach long favored in this state."

The judges noted, however, "Our own research, and that of the parties, yields no reported decisions in this state construing this policy language."

In 1997, John Marquess, a partner at what was then Marquess, Morrison and Trimble in Turnersville, N.J., represented defendant Barbara Gorna in an automobile accident case. The case was assigned by Gorna's insurer, American Independent Insurance Co., a client of the firm.

In 2000, Marquess was bought out by his two partners but, with their consent, continued to represent Gorna as a Haddonfield, N.J., solo. No substitution of attorney appears to have been filed.

The same year, a jury found Gorna 100 percent liable for the injuries to the plaintiff, Kimberly Jolley. Without Gorna's consent, Marquess entered into an agreement with Jolley's attorney that Gorna would pay Jolley $750,000, plus interest, in damages. Marquess told Gorna she would not be responsible for the judgment above her $15,000 coverage limit, but that was not stated in the agreement.

Attorney is hired to fix IRS problems.  Tells Client to give he a check, and he will pay the IRS.  Check cashed, IRS not paid, Attorney arrested, and now a legal malpractice case.  Here is the story.

"BENTONVILLE -- A Bentonville attorney arrested on fraud and theft charges has been sued by the mother and son who told police he mishandled amendments to their 2005 federal tax returns and Internal Revenue Service payments.

Rogers attorney Timothy C. Hutchinson filed the suit Wednesday in Benton County Circuit Court on behalf of Carol L. Fountain and Charles Fountain.

Archer was arrested earlier this month on criminal charges related to incidents addressed in the civil suit. He remains in the Benton County Jail in lieu of a $75,000 bond and is set to be arraigned July 2.

The civil suit claims the Fountains retained Archer in April 2006 to handle filing of amended tax returns that included income from an inheritance the Fountains received.

Archer told Carol Fountain she owed $36,000 to the IRS, and he asked the check be made out to him and he would forward the money.

Rather than paying the IRS, Archer cashed and presumably spent the money, the suit claims, and the tax return was never filed. "

This story from law.com:

"A rare U.S. Court of Appeals for the Federal Circuit decision that declared a patent unenforceable because of the patent attorney's inequitable conduct during the patent application process is likely to increase lawyers' disclosures to the patent office.

On May 18, the court upheld a California federal court decision that declared a McKesson Information Solutions August 1989 patent involving bar-coding technology for hospitals unenforceable.

The Federal Circuit agreed with the lower court that patent lawyer Michael Schumann acted with deceptive intent by withholding three key items of information from the U.S. Patent and Trademark Office, including details about prior art and a rejected co-pending patent application.

Schumann, who is now with Minneapolis-based intellectual property firm Hamre, Schumann, Mueller & Larson, declined to comment. "

The details are a little sparse in this story but after losing a $ 6.5 milliion medical malpractice case, the hospital and its attorney are now on the hook for a $ 1.3 million sanction too.

"A Parkersburg-area hospital has been ordered to pay a $1.3 million sanction in a medical malpractice lawsuit. This after a judge says it violated court orders, among other misconduct, during a recent trial.

Wood County Circuit Court Judge Robert Waters imposed the sanction against Camden-Clark Memorial Hospital in an order issued last week.

Waters' order says Camden-Clark's misconduct included inaccurate answers during the discovery process and inaccurate testimony.

This order came from an underlying lawsuit alleging the malpractice in the death of Hilda Boggs.

Boggs died in 2001 following surgery on a broken ankle. "

A Wood County jury found that the anesthesiologist negligently overdosed Boggs with Lidocaine.

The jury in that case awarded $6.5 million to Boggs' estate in March 2006. The case is now being appealed by the hospital. "

We really can't explain it.  Here is the story.  Was it the unhealthy aspect of french fries ?  Was it residual anti-French feelings from the Iraq war?  Would "freedom fries" have been OK?

"Saying a bankruptcy judge was "a few french fries short of a Happy Meal" may cost an out-of-state lawyer the ability to practice in U.S. Bankruptcy Court for the Southern District of Florida.

The comment already has cost Chicago-based McDermott Will & Emery partner William P. Smith his client -- Miami Beach's Mount Sinai Medical Center & Miami Heart Institute.

Bankruptcy Judge Laurel Myerson Isicoff in Miami also slapped the hospital with a restraining order at the same hearing where Smith made his fast-food quip. She found Mount Sinai's anti-competitive actions in the bankruptcy case of South Beach Community Hospital violated bankruptcy law.

During a May 7 hearing, Smith told Isicoff, "I suggest with respect, your honor, that you're a few french fries short of a Happy Meal in terms of what's likely to take place."

Smith's comment and a show-cause order against him were first reported by the legal blog Above the Law.

Smith did not return calls for comment, and Mount Sinai spokeswoman Kathleen Dorkowski declined to comment on the case.

McDermott Will & Emery issued a statement, saying: "We expect our lawyers to observe established rules and protocols of professional conduct in the courtroom. Any departure from that standard is of concern to us, and we look forward to a resolution of this matter."

Plaintiff is injured in a train accident, and wins $3 million.  Law firm and a money manager both get into trouble. The Story:

 Attorney "Lakin was indicted April 23 on charges of cocaine use and distribution as well as transporting a minor male to Malibu, Calif. with the intent to engage in sexual activity. He is free on a $250,000 unsecured bond and his trial is set to begin Jan. 10, 2008, in Benton. "

"Stephen Williams of Chouteau, Okla. filed suit against the Lakins in federal court on Sept. 26, 2006, after his $3 million-plus, tax-free structured settlement with Union Pacific over a 1991 injury was absconded by money manager-turned thief James Gibson"

"U.S. District Judge Claire V. Eagan, chief judge of the Northern District of Oklahoma, entered the judgment on April 18 after the Lakins did not appear in the case, even after being granted extra time to answer. The case was transferred to the U.S. District Court of the Southern District of Illinois on May 24. "

"In April, the Record reported that Lakin's malpractice insurer, the Illinois State Bar Association Mutual Insurance Co., has not paid the firm's clients over the loss of funds.

Clients of Lakin and other firms lost about $50 million eight years ago when Gibson, the manager of their settlement funds, stole the money. "

Lead Plaintiff in a class action is unhappy with settlement amount, and seeks to sue the class action attorney and sues class action attorney in legal malpractice.  Holding:  plaintiff is collaterally estopped from suing.

Hinshaw reports: "J. Michael Koehler v. Jules Brody, et al., ___F.3d___, 2007 WL 895864 (8th Cir. 2007)

Brief Summary

Two years after a court approved a class action settlement, a lead plaintiff brought suit against former class counsel for breach of fiduciary duty and misrepresentation, claiming that the settlement was too low and that it should have been paid in stock to avoid adverse tax consequences. The appellate court affirmed the dismissal of these claims on the ground that the plaintiff was collaterally estopped from suing class counsel to attack the class recovery.

Complete Summary

This case arose out of a global settlement of a number of class action cases related to the merger of NationsBank and BankAmerica into Bank of America. J. Michael Koehler was a lead plaintiff and class representative. The court appointed the firms of Green, Schaaf & Jacobsen, P.C., Chitwood & Harley, and Stull, Stull & Brody as co-lead counsel. A mediation was held in January 2002 under the direction of a former federal district judge. Mr. Koehler and some other lead plaintiffs were present at negotiations but left after two days. The mediation continued and resulted in a $490 million settlement.

Hearings were then held to determine the fairness of the settlement. Mr. Koehler retained separate counsel and objected to the settlement. He felt the settlement was too low and was disproportionately distributed among the shareholder classes. He also felt the settlement was invalid because he had not been present when the settlement agreement was reached, because he allegedly had been misled by counsel and because counsel had allegedly made false representations to the court about his approval that violated the Private Securities Litigation Reform Act of 1995 (the “PLSRA”). Mr. Koehler also alleged other ethical violations by the attorneys, and submitted an expert affidavit from a legal ethics specialist regarding the alleged breaches. Id. at *1. "

Here is a NJ case about legal malpractice insurance coverage for successor attorneys.

"In this appeal, we decide whether a policy of insurance providing coverage for legal malpractice requires the insurer to provide indemnification to a former partner of a law firm for acts of malpractice allegedly committed subsequent to the dissolution of that firm. Under the facts presented, we conclude that the former partner was acting "solely in a professional capacity on behalf of such firm," as required by the policy of insurance and was entitled to a defense and indemnification. Accordingly, we affirm the trial court's grant of summary judgment in favor of defendant John J. Marquess"

Here in the SCOKY Blog we have a list of upcoming KY Supreme Court arguments, complete with briefs and records.  The case of Kaplan v. Puckett appears to be a successful prisoner v. attorney legal malpractice case.

Follow for results!

This "immediate release" letter from whistleblower sounds like an attempt by the client to shame defendants into a settlement.  We are often asked whether shame plays a role in legal malpractice.  Clients often believe that an attorney will settle rather than litigate for fear of having this sort of a press release hit the web.

We saw this on a search for legal malpractice.  How many others read this is unknown.  Do you think this will pressure the attorneys's insurance carrier to settle?

Loeb & Loeb has been using a retainer agreement that required arbitration.  This reported case is the second of two in which Loeb & Loeb has successfully stayed legal malpractice cases in favor of arbitration.  This case held that the Supreme Court Case is stayed whild arbitration goes  forward.  Other courts have held that arbitration of legal malpractice cases runs against public policy.

This story is beyond belief.  Plaintiff is convicted of a crime, and then the conviction is reversed.    However, no one, not his attorney, not the DA, and not the state ever let him out!  Result?  He stayed in jail for 17 years after reversal.

"Although the Michigan Court Appeals in 1989 overturned his 1987 conviction because inadmissible evidence was used against him, no one ever acted on the court's order. It just sat there while Heyerman sat in prison -- for an incredible 17 years. His original attorney did nothing to challenge his imprisonment.

The government was equally at fault. The Calhoun County prosecutor and circuit court failed to either re-try Heyerman or drop charges against him. Meanwhile, the Parole Board denied him release three times after he had served his minimum sentence.

Heyerman would still be in an Upper Peninsula prison if another inmate, a jailhouse lawyer, hadn't helped him write a writ to get a new trial. Two weeks ago, a Calhoun County judge finally dropped all the charges against the 54-year-old former janitor. "

Heyerman plans to sue his original attorney and to file a civil suit against the state for wrongful imprisonment. This mess is likely to cost taxpayers more than they paid to keep Heyerman locked up.

Here, Hinshaw reports a NJ attorney who lost legal malpractice coverage for failure to report.  Court found that it should have known, subjectively that notice to the insurer was due.  NY has similar cases, for example, Cass v. American Guarantee in which the law firm should have given notice.  As determined by Justice Tolub , any reasonable attorney would have known that a malpractice case was on the way, after the worker compensation case was dismised.

Here is a divorce legal malpractice legal fee case from the upper reaches of NJ society, complete with client meetings at the country club, promises to pay for the divorces of others, vindictive hiring of attorneys...you name it.

By way of background, on August 18, 1997, defendant retained plaintiff to represent him in a contentious divorce action already underway and involving substantial marital assets. At the time, defendant and his wife were separated and defendant was residing with Moran and her children, one of whom was the daughter of John Izmirlian, from whom Moran had already been divorced.

Defendant's own matrimonial dispute was scheduled for trial on May 19, 1998, less than nine months after plaintiff was retained. Rather than proceed to trial, defendant and his former wife elected to engage in settlement negotiations and after two days, on May 21, 1998, reached an agreement. A final judgment of divorce was entered the next day, May 22nd, after a hearing in which the terms of the property settlement agreement (PSA) were placed on the record and the parties testified they entered into it knowingly, freely and competently.

Defendant also appeals from an October 28, 2005 order of final judgment holding him liable for fees and costs incurred by plaintiff on behalf of Moran. The genesis of that matter was in late January-early February, 1999 when, during the course of his own post-divorce litigation, defendant arranged a meeting with plaintiff and Moran to discuss plaintiff's representation of Moran in a post-divorce action initiated by Moran's former husband Izmirlian. Earlier, defendant had conveyed to plaintiff his opinions that Izmirlian was dishonest, concealing his income from both the Internal Revenue Service and Moran, and that he should be made to pay all the child support for the daughter then living with defendant and Moran. By all accounts, that meeting was held at a local country club and thereafter, on February 5, 1999, plaintiff and Moran signed a retainer agreement.

According to plaintiff, the meeting lasted two hours during which they talked almost exclusively about Moran's legal situation. Defendant once again mentioned that Izmirlian was attempting to hide his finances and that he wanted to ensure Izmirlian paid his support obligations. Moran said she was unable to pay for plaintiff's services and plaintiff herself knew that Moran had no steady means of supporting herself, that Izmirlian had no money, and that Moran had previously discharged a fee obligation of approximately $15,000 in bankruptcy proceedings. Consequently, plaintiff raised the issue of payment, asserting that litigation would be expensive and that she could not proceed without payment. According to plaintiff, defendant assured her that he was "willing to throw some money at this, so that that little prick pays to support his kid." With that assurance, plaintiff entered into a retainer agreement, and commenced preliminary work on the case, including arranging a meeting between the parties, which turned out to be unproductive.

The following day, May 23rd, defendant, apparently concerned for his former wife, agreed to renegotiate the PSA, however, these negotiations eventually proved unavailing. As a result, defendant's former wife moved to set aside the PSA and a twenty-two day plenary hearing ensued in which she claimed she was under duress at the time. At the conclusion of the evidence, Judge Cass denied the application to set aside the PSA, finding it was fair and reasonable and not the product of duress or incompetence. "  Read the rest!

Anthony Lin reports in the NYLJ that Sidley Austin has avoided prosecution for tax shelter manipulation, even though one of its "expelled" attorneys is facing felony charges.  SA will pay $ 39 milliion in fines.

"Federal prosecutors have decided not to bring criminal charges against Chicago law firm Sidley Austin over its involvement with illegal tax shelters, though the law firm will pay a civil penalty of $39.4 million to the Internal Revenue Service.

In announcing the decision yesterday, U.S. Attorney Michael J. Garcia of the Southern District of New York distinguished the actions of the firm from that of former tax partner Raymond J. Ruble, who is already facing a criminal trial in Manhattan federal court.

Mr. Ruble, who was expelled from Sidley Austin in 2003, and several former employees of accounting firm KPMG are charged with creating and promoting tax shelters banned by the IRS, with Mr. Ruble also issuing hundreds of opinion letters meant to provide legal cover for the shelters. The IRS estimates 700 wealthy individuals and corporations relied on Sidley Austin opinions in purchasing illegal tax shelters.

In deciding not to prosecute the law firm, Mr. Garcia said his office took into account the fact that most of Mr. Ruble's activities took place when he was a partner at New York's Brown & Wood, with which the firm then known as Sidley & Austin merged in 2001. The former Sidley & Austin had never had a tax shelter practice and took steps at the time of the merger to rein in Mr. Ruble's practice. Mr. Garcia said Mr. Ruble continued his practice only by misleading his partners at the merged firm. "

Here is a very interesting case from the 2d Department.  It involves one of the best and most known medical malpractice practitioners, who has more multi-million dollar verdicts and settlements than most of us have even read about.  This case teaches three lessons.

The first is that an infant's compromise, a wrongful death compromise or other judicially decided award of legal fees virtually kills any legal malpractice claim.

The second is that it is probably always better to communicate with your clients over settlement demands in writing.  Here there was an offer of $ 1 million to settle, which was turned down, ending in a verdict of $ 350,000.  Client admitted, kind of, that she knew of offer, perhaps...but called it a "settlement value" rather than an offer.

Third lesson, well known to all, is don't ask a question without either knowing what answer will be given, or prepping the witness with an appropriate answer.  Here, plaintiff's attorney asked what would have happened if the $1 million had been offered, and the client waffled.

Result?  Legal malpractice dismissed.

What an International Cast!  "Southern District of New York Judge Lewis Kaplan dismissed civil racketeering charges seeking millions in damages against Faith Zaman and Thomas William Derbyshire by the younger brother of the Sultan of Brunei -- Duli Yang Teramat Mulia Paduka Seri Pengiran Digadong Sahibul Mal Pengiran Muda Haji Jefri Bolkiah, otherwise known as Prince Jefri -- and companies he controls. Alleged frauds committed by an English husband-and-wife legal team were not enough to support a prince's claim that his former advisers were engaged in a racketeering enterprise, a federal judge has ruled.

Prince Jefri had hired the barristers to serve as "principal legal advisors, strategists and confidantes" from May 2004 to November 2006.

But he claimed they abused his trust by selling a piece of the prince's property in a "sham transaction" to an entity they owned, used his money to buy property for one of their own companies, faked documents to overstate Zaman's compensation and hired her brother for an unnecessary job at New York's Palace Hotel, which was owned by one of Prince Jefri's companies.

Here a tax preparer was sued for not telling an "innocent spouse" about the danger of filing a joint return, when she could have filed an individual return and avoided a startling amount of liability.  After bankruptcy, wife sued and lost.

"Shortly before Ted’s death, Camille discovered that Ted had failed to pay the taxes. When attempting to sell the marital home, Camille learned that tax liens had been placed on the property to secure Ted’s business liability for federal withholding tax, interest and penalties. Camille ultimately fi led for bankruptcy and settled the federal and state tax liabilities. Camille then sued Crincoli and his fi rm for accounting malpractice, asserting that he had failed to advise her that, by fi ling a joint tax return, she could be exposed to personal liability for taxes, interest and penalties relating to her husband’s business – liabilities that she would not have borne had she fi led separately.

At trial, Camille’s accounting expert testifi ed that Crincoli had deviated from accepted accounting practices by failing to explain the risks of fi ling a joint return to both spouses. The expert conceded, however, that these “accepted practices” did not derive from standards set by the AICPA or the IRS, but rather were based upon his “personal” standards. In contrast, Crincoli’s expert testifi ed that Crincoli had acted properly and should not have been expected to investigate the accuracy of the information provided by the husband or to discover that the marital home was held in the wife’s name. The expert testifi ed further that it was not uncommon for one spouse to act as the agent for the other in communicating with a tax preparer.

After a four-day trial, the trial judge dismissed the complaint and entered judgment in the amount of $6,000 (the outstanding accounting fees) in favor of Crincoli. On appeal, the Appellate Division affi rmed the lower court’s ruling. The appeals court agreed with the trial court’s ruling that Camille’s expert was not credible, and that the standard of care set forth by Crincoli’s expert should govern. The appeals court also noted, that even if Crincoli had been negligent, that his negligence was not the proximate cause of Camille’s damages; she did not present any evidence that, had she been informed of the risks of fi ling jointly, she would have acted differently.

While both the trial and appeals courts ultimately sided with the tax preparer in Daunno, accountants and tax preparers should consider providing a standard written disclosure to their clients making clear that they are relying on the information supplied to them by the clients themselves and that they are undertaking no duty to conduct an independent investigation to confi rm the accuracy or completeness of that information. "

Dismissal under CPLR 3216, for a failure to provide discovery, or to follow a court order of discovery has been generally thought to preclude the use of CPLR 205.  CPLR 205 is a "saving statute"  which allows plaintiff to start a second action within 6 months of the dismissal of the first, so long as it was not for certain reasons.  Here, in this case:

"CPLR 205(a) provides that

"[i]f an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff, or, if the plaintiff dies, and the cause of action survives, his or her executor or administrator, may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action and that service upon defendant is effected within such six-month period."
While dismissal of an action for failure to comply with discovery orders has been held to be a dismissal for neglect to prosecute the action' within the meaning of CPLR 205(a) (see Andrea v Arnone, Hedin, Casker, Kennedy & Drake, Architects & Landscape Architects, P.C. [Habiterra Assoc.], 5 NY3d 514, 518), here, the plaintiffs' conduct did not rise to that level. "

There is a saying that bad cases make bad law.  We've always understood that proverb to mean that poorly argued or conceptualized cases affect the entire field of law.  Here is an example of the situation.  Pro-se defendant attorney in a legal malpractice case was served directly in hand by the attorney for plaintiff.  Why the attorney did not use a process server is beyond us.  Nevertheless, this appellate division case is now law, and must be digested.

"The advocate-witness disqualification rules contained in the Code of Professional Responsibility provide guidance, not binding authority, for courts in determining whether a party's [counsel], at its adversary's instance, should be disqualified during litigation" (S & S Hotel Ventures Ltd. Partnership v 777 S. H. Corp., 69 NY2d 437, 440). At bar, the hearing court providently exercised its discretion in permitting the plaintiffs' counsel to testify at a hearing that he personally delivered the summons and complaint, by hand, to the defendant Ronald J. Chisena. Where, as here, there is no necessity for the plaintiffs' counsel to be called as a witness at trial, no violation of the advocate-witness rule exists (see Code of Professional Responsibility DR 5-102[c][22 NYCRR 1200.21(c)]; S & S Hotel Ventures Ltd. Partnership v 777 S. H. Corp., supra at 443). "

Attorney Malpractice is a litigation form with many highly sophisticated rules.  Attorneys make up the rules of attorney litigation.  Legal malpractice is subject to very stern analysis by judges.  Here is an article from Texas which sets forth rules on specificity there.

"In a further illustration of the need to avoid conclusory affidavits in summary judgment proceedings, a legal malpractice claim foundered when an affidavit concerning damages was found to be conclusory in United Genesis Corp. v. Brown, No. 04-06-00355-CV, 2007 WL 1345372 (Tex. App.—San Antonio May 9, 2007). "

Roger D. Blackwell is a former marketing professor in college, who did very well for himself.  However, he was convicted of insider trading when a "federal jury in Columbus found that Blackwell, a member of Worthington Foods Inc.'s board of directors, illegally tipped off friends and relatives in 1999 to Kellogg Co.'s secret pending purchase of Worthington Foods, and then covered it up"  Now, in this story, a " Minnesota insurer wants former marketing professor Roger D. Blackwell to return $2.6 million the company gave him to help pay for his legal defense against federal insider-trading charges."

What is even more astounding is that he paid $6 million to his criminal defense attorneys.  How does a professor even contemplate such a big fee?  Better yet, the law firm is now suing him for an additional $ 2.7 million which they say he owes! "The former consumer-behavior professor said in a legal malpractice suit filed last year that he paid nearly $6 million to his previous trial attorney, Thomas O. Gorman, and law firm Porter, Wright, Morris & Arthur.

Blackwell said Gorman and Porter, Wright, based in Columbus, misled him about his defense, did a poor job handling his criminal trial and charged him excessive fees.

Gorman and Porter, Wright denied Blackwell's claims and countersued for more than $2.7 million in allegedly unpaid fees and expenses.

After Blackwell was convicted, he hired attorney William Wilkinson and law firm Thompson Hine for the appeals process, which was unsuccessful.

In addition to Blackwell's six-year sentence, he was fined $1 million by U.S. District Judge James L. Graham. Blackwell also faces a potential $1 million judgment in a civil insider-trading complaint filed against him by the U.S. Securities and Exchange Commission.

It bills itself as "The Oldest Law Journal in the United States", and reports today on this legal malpractice dismissal in Pennsylvania.  Here, in an estate/inheritance legal malpractice, the case was dismissed on motion, and the appeal ran afoul of a Penn statute against vagueness.  What follows is a discussion of the statute:

"A Superior Court panel has affirmed the dismissal of a legal malpractice action brought against Fox Rothschild by two brothers who claimed the firm’s handling of a family will left their inheritance lighter than it should have been.

However, the appellate judges in Hess v. Fox Rothschild ruled that Philadelphia Common Pleas Judge Annette M. Rizzo had been wrong to reject the brothers’ appeal as too vaguely worded.

The case sheds light on a rare theme of the ongoing Rule 1925(b) saga.

Typically, state court judges have used that appellate procedural rule to bounce an appeal if the appellate statement was too long and/or raised too many issues."

But the rule also directed attorneys not to make their statements overly vague, and a number of appeals were quashed under that provision of the rule.

When the justices approved amendments to Rule 1925 earlier this month, they prospectively precluded judges from nixing an appeal solely because of the number of issues raised. That measure was likely in response to practitioners’ gripes that appeals in complex or high-stakes cases might necessarily involve dozens of issues.

But the high court also added new language to the rule that will permit civil litigation appellants to attach to their 1925(b) statements a preface explaining why the statement has been phrased in general terms if don't believe they can "readily discern the basis" for trial judges’ decisions.

In a NYLJ article today [subscription], Professor Patrick Connors discusses letters of retention and litigation.

He writes:

"In this installment, we will take a few steps back to the inception of the representation and discuss a rule that affects the substantive rights of lawyers vis-à-vis their clients. ""Conclusion

Until the Court of Appeals finally speaks to the matter, we recommend that the bar satisfy the requirements of Part 1215 and observe the resolution of these issues from afar."

While many think of trial law as a form of gambling, here is the real thing.  Keno operator wants to break up a partnership and open his own gambling shop.  Hires attorneys to do the transactional work, and gets bad advice.  He wins  $1.6 million, which is reduced to $229,000.

"The Nebraska Supreme Court soon will hear a two-sided appeal in a legal malpractice case involving a keno operator and the state's second-largest law firm.

Richard T. Bellino wants the court to reinstate a jury verdict awarding him $1.6 million but District Judge Patricia Lamberty ruled that the trial evidence did not justify that amount and ordered McGrath, North, Mullin & Kratz to pay Bellino $229,000.

In a brief to the court, Bellino's attorneys, David Domina and Claudia Stringfield wrote, "A jury verdict should be jealously guarded and maintained by our courts, and Nebraska law does not permit a district court to crown its view by underwriting a conclusion rightfully reached and supported by evidence, but not agreed to by the district court."

The law firm wants the high court to dismiss the case entirely. "

In a brief for the firm, attorneys John Douglas and David Blagg wrote, "An attorney who acts in good faith and with an honest belief that his or her actions are well founded in the law and in the best interest of his client, is not liable for malpractice even if he is mistaken."

Douglas and Blagg wrote that the trial court should have ruled that Bellino's attorneys caused him no damages. "

Hinshaw reports this case:

"J. Michael Koehler v. Jules Brody, et al., ___F.3d___, 2007 WL 895864 (8th Cir. 2007)

Brief Summary
Two years after a court approved a class action settlement, a lead plaintiff brought suit against former class counsel for breach of fiduciary duty and misrepresentation, claiming that the settlement was too low and that it should have been paid in stock to avoid adverse tax consequences. The appellate court affirmed the dismissal of these claims on the ground that the plaintiff was collaterally estopped from suing class counsel to attack the class recovery.

Complete Summary
This case arose out of a global settlement of a number of class action cases related to the merger of NationsBank and BankAmerica into Bank of America. J. Michael Koehler was a lead plaintiff and class representative. The court appointed the firms of Green, Schaaf & Jacobsen, P.C., Chitwood & Harley, and Stull, Stull & Brody as co-lead counsel. A mediation was held in January 2002 under the direction of a former federal district judge. Mr. Koehler and some other lead plaintiffs were present at negotiations but left after two days. The mediation continued and resulted in a $490 million settlement. The court looked at two other similar cases in which plaintiffs were collaterally estopped from suing representatives because implicit in the lower court’s approval of the settlement was a finding that the class had been adequately represented. See Laskey v. UAW, 638 F.2d 954 (6th Cir. 1981) and Thomas v. Powell, 247 F.3d 260 (D.C. Cir. 2001). Mr. Koehler could not establish injury without relitigating an issue already decided by the class action court. The same rule applied whether the allegations were of malpractice or breach of fiduciary duty and related claims of aiding and abetting a conspiracy. Although Mr. Koehler tried to allege newly discovered evidence to get a “second bite of the apple,” the court noted the issue is not whether the district court was aware of every fact alleged when it approved settlement, but whether the earlier judgment prohibits Mr. Koehler from litigating his claim that the alleged misconduct was the proximate cause of injury to him. Id. at *7.

The court concluded that Mr. Koehler was effectively trying to renew his old arguments that the settlement was too low. When the district court approved the settlement over Mr. Koehler’s objections and awarded attorney fees, it determined the attorneys had provided “more than adequate representation and that the very favorable settlement was ‘fair, reasonable and adequate.’” Id at *7. Mr. Koehler could not establish a breach of duty and a causal injury without relitigating an issue already decided, and therefore the dismissal was affirmed.

Significance of Case
This decision affords class counsel some protection against plaintiffs with “buyer’s remorse” who may try to sue counsel for malpractice or breach of fiduciary duty to get another chance to reopen the issue of the settlement amount. "

Lory v. Parsoff,  296 A.D.2d 535; 745 N.Y.S.2d 218; 2002 N.Y. App. Div. LEXIS 7584 
illustrates the danger of wrongly filing a security documents, such as a UCC1.  Of course, purchaser defaulted, and lender lost all.  In the legal malpractice case, attorney lost its fee paid to date, the cost of trying to fix the case, as well as the value of the secured interest.  In a later appeal, fees paid to the bankruptcy attorney were disallowed.

"An attorney's failure to file a UCC financing statement in the manner necessary to perfect his client's security interest constitutes malpractice as a matter of law (see Hart v Carro, Spanbock, Kaster & Cuiffo, 211 AD2d 617; Deb-Jo Constr. v Westphal, 210 AD2d 951). Furthermore, the Supreme Court properly granted summary judgment on [***3] the cause of action to recover an award of an attorney's fee expended to retain alternative counsel as a result of the defendants' malpractice (see Affiliated Credit Adjustors v Carlucci & Legum, 139 AD2d 611). Additionally, there is no merit to the defendants' challenge to the plaintiff's claim for a refund of the legal fee paid to them in connection with the negligent representation (see Campagnola v Mulholland, Minion & Roe, 76 NY2d 38)."

Law.Com reports that 2 Florida attorneys were disciplined for settling a big big case, and then agreeing to be paid not to take more cases.

"The Florida Supreme Court disbarred one plaintiffs lawyer and handed another a two-year suspension for taking a $6.4 million fee from the defense to file no more cases against E.I. du Pont de Nemours & Co.

Roland R. St. Louis Jr. and Francisco R. Rodriguez of the defunct Miami firm of Friedman, Rodriguez, Ferraro & St. Louis had represented 20 clients suing DuPont for damages allegedly resulting from exposure to Benlate, a fungicide suspected of causing severe crop damage and withdrawn from the market in March 1991.

St. Louis, "the main strategist in the case," had DuPont in a difficult position. The trial court orally accepted a 110-page motion for sanctions for discovery abuse in the lead case, telling DuPont that it intended to sanction the company by striking its pleadings. The court encouraged it to settle the case, according to the high court's opinion. Davis Tree Farms Inc. v. E.I. DuPont Nemours & Co., No. 1992-20006-CA-01 (Miami-Dade Co., Fla., Cir. Ct.).

DuPont eventually agreed to pay the plaintiffs $59 million if they would get the trial judge's order vacated and sealed without publicity, settle 18 cases contingent upon the settlement of two key cases, and keep the settlement figures confidential, the opinion said.

At the same time, St. Louis and Rodriguez also agreed to a secret side deal by which the firm would receive a separate $6,445,000 fee from DuPont to refrain from further Benlate litigation against the company and to serve as counsel and/or consultants for the company in future matters, the high court said.

For the professional conduct rules violated in taking this fee, the state Supreme Court disbarred St. Louis and ordered him to disgorge $2,277,663, his share of the fee DuPont paid the firm. The Florida Bar v. St. Louis, No. SC04-49. Rodriguez received a two-year suspension, with a fee yet to be determined. Rodriguez could be ordered to pay as much as $1.4 million to the state bar's Clients' Security Fund. The Florida Bar v. Rodriguez, No. SC03-909. "

We reported on this case yesterday.  An ill known US Bankruptcy provision allows a 2 year period in which to bring an otherwise timely action, once the cause of action becomes an asset the estate in bankruptcy,

Victoria Kremen, who underwent unnecessary mastectory, should have had the benefit of "section 108 of the Bankruptcy Code provides in relevant part that: "[i]f applicable nonbankruptcy law . . . fixes a period within which the debtor may commence an action, and such period has not expired before the date of the [debtor's] filing of the [bankruptcy] petition, the trustee may commence such action only before . . . two years after the order of relief." 11 USC §108 (a) (2). In turn, section 301 of the Bankruptcy Code provides that "the commencement of a voluntary case under a chapter of this title constitutes an order for relief under such chapter." 11 USC §301 (b). "

Her medical malpractice and appellate attorneys completely missed this winning argument against dismissal and are now legal malpractice defendants.  Here is the case.

A bill just passed out of committee in the NY State Senate, sponsored by the Court System [OCA] would amend CPLR 2001 to permit courts to forgive errors in the starting of law suits.  One example is a well-known mistake of purchasing an index number for a motion seeking leave to file a late notice of claim, receiving permission, and then using the same index number to start the case.

Joel Stashenko, in the NYLJ reports:

"The failure to properly acquire an index number or other similar procedural error attorneys make when filing an action, sometimes with fatal consequences to their cases, could be disregarded under legislation that has reached the floor of the state Senate.

Sponsors said the measure was prompted by a series of Court of Appeals rulings holding that such errors can result in outright dismissal of suits, provided that a timely objection is made to the defective filings. In one of the most recent rulings, in Matter of Harris v. Niagara Falls Bd. of Education, 6 N.Y.3d 155 (2006), the Court dismissed an action because the plaintiff filed the summons and complaint under the same index number that was used to make a motion to serve a late notice of claim and failed to pay another index fee.

The legislation stems from a proposal made by the Advisory Committee on Civil Practice at the Office of Court Administration. The Senate sponsor of the bill, Codes Committee Chairman Dale Volker, said the bill was introduced at the request of Chief Administrative Judge Jonathan Lippman.

The legislation, S3563, would amend §2001 of the Civil Practice Law and Rules to specify that "the failure to purchase or acquire an index number or other mistake in the filing process" that does not prejudice either party in the action "shall be disregarded" by the court. If a mistaken non-payment of a fee is involved, the legislation calls for the applicable fees to be paid and the non-prejudicial error to be ignored.

The bill would apply to the "filing of a summons with notice, summons and complaint or petition to commence an action."

Mr. Volker said yesterday the measure clarifies what he called uncertainty about how serious errors made in the initial filing of civil actions are in light of the finding in Harris and other court rulings, and also the discretion judges have under CPLR §2001 to allow for their correction.

"It gives the court discretion to correct or ignore mistakes that don't go to the heart of the cases," Mr. Volker, R-Hamburg, said.

The bill cleared Mr. Volker's committee on Tuesday."

At first blush, one assumes a loss of attorney-client privilege in legal malpractice, or in this case, an indeminfication case for legal costs.  The sued party would like to explore how the case was settled, whether settlement was reasonable, and why they should have to pay a settlement in which they did not participated.  Part of defending this case will be dissecting the attorney's performance.

"A party suing to enforce purported indemnification rights for the costs of a prior lawsuit does not automatically waive its attorney-client privilege for communications from the prior action, an appellate panel has held.

"So far as the record for this appeal discloses, plaintiff, in commencing and prosecuting this action, has done nothing to waive the protection of the attorney-client privilege or the work-product doctrine as to materials concerning the defense and settlement of the prior lawsuit for which indemnity is sought," Justice David Friedman (See Profile) wrote for the unanimous Appellate Division, First Department, panel in Deutsche Bank Trust Company of Americas v. Tri-Links Investment Trust, 8893N. "

A Rochester Law firm sent a letter to a Connecticut artist, and ended up in SDNY over the Fair Debt Collection Practices Act.  Right now, the case stays in the SDNY and will not be moved to Western District, wherein Rochester lies.

"PLAINTIFF CONNECTICUT resident's lawsuit alleged that defendant Rochester, New York-based law firm was a "debt collector" as defined by the Fair Debt Collection Practices Act (FDCPA) and that its April 4, 2006 letter, mailed to her New York city art studio, violated the FDCPA. After considering the factors in D.H. Blair & Co. Inc. v. Gottdiener, the court denied the law firm's motion to transfer plaintiff's suit - seeking actual and statutory damages, costs, and attorney's fees - to the Western District of New York. Noting that plaintiff brought suit in the district to which defendant sent - and plaintiff received - the letter, the court deemed plaintiff's forum choice entitled to deference. In concluding that the parties' convenience also called for retention of plaintiff's action in the Southern District of New York, the court noted that plaintiff regularly travels to the district in order to paint in her studio, and that the law firm had not shown that travel from Rochester to defend the action would impose a significant hardship. "

Hinshaw reports:

"California Court Finds No Duty Owed to Reinsurer by Defense Attorney Who Was Hired by the Primary Carrier

May 15, 2007

Zenith Insurance Company v. Cozen O’Connor, ___Cal.Rptr.3d___, 2007 WL 841119 (Cal.App. 2 Dist. 2007)

Brief Summary
The California Court of Appeal for the Second District affirmed the dismissal of a legal malpractice claim brought by a reinsurer against a law firm hired by the primary carrier to represent the insured. The court held that the firm owed no duty of care to the reinsurer because no attorney-client relationship existed under an implied contract, nor was the reinsurer a third party beneficiary of the underlying attorney-client relationship.

Complete Summary
Royal Insurance Company (“Royal”), the primary carrier, had entered into a reinsurance agreement with Zenith Insurance Company (“Zenith”) for coverage provided by Royal to Foss Maritime (“Foss”) regarding liability for the environmental cleanup of the Middle Waterway of Commencement Bay in Tacoma, Wash. (the “Middle Waterway claim”). Royal advised Zenith that there were 22 other insurers potentially liable for the same claim. Royal engaged the Cozen O’Connor firm to provide legal services to Royal regarding this claim, as well as other Foss pollution claims in the State of Washington. "

All right, the attorney did not "bark like a dog".  His behavior was bad enough for the judge to boot him out of West Virginia [or revoke his admissions pro haec vice]  Here is the story.:

"WINFIELD - Putnam Circuit Judge Ed Eagloski chased a Texas lawyer back to the Lone Star State for misbehaving in a deposition.

At a hearing May 11, Eagloski vacated an order allowing Kevin Oncken of San Antonio to defend Putnam General Hospital in malpractice suits.

"He was degrading, demeaning and completely unprofessional," said Eagloski, who had seen tape of Oncken deposing a plaintiff.

Eagloski said Oncken told Charleston attorney Richard Lindsay that if he wanted to talk to him, he should put on lifts. Oncken stands about 10 inches taller than Lindsay.

Eagloski said he would refer Oncken to the West Virginia Bar, and he said he would send the tape to the Bar. He also said he could also take privileges away from Oncken's partner, Jeffrey Uzick.

"But I think he will take the warning of this court appropriately," Eagloski said. "Will you do that, sir?"

"Yes sir," Uzick said. "

Here, law firm disqualified because it represented plaintiff and defendant at the same time in different cases.  Lawfirm's response, No, its OK!!

"HRH Construction LLC v. Palazzo, 600857/06
Decided: May 4, 2007

Moreover, although multiple representation may be permissible where, after full disclosure of the risks of such representation, the attorney has obtained the consent of both parties, here there is no indication that disclosure was made and consent obtained. Although HRH may well have been sloppy about keeping track of the attorneys that represented the company in different cases, a client has no fiduciary duty to be vigilant about the identity of its attorneys. In contrast, given the mandates of DR 5-105 and DR 9-101, attorneys have a responsibility to "'avoid not only the fact, but even the appearance, of representing conflicting interests'" (Cinema 5 Ltd. v. Cinerama, Inc., 528 F2d at 1387 [citation omitted]), and to insure that they have not undertaken simultaneous representation without disclosing the existence of that representation and obtaining consent of both clients. Unfortunately, counsel for defendants have failed to do so here.

Accordingly, it is hereby

ORDERED that plaintiff's motion to disqualify is granted. "

This is a sad case of willful ignorance, passive-aggressive client behavior, and a refusal to acknowledge reality. Its a car accident turned legal malpractice case.  Unusually, it is the defendant - client who is suing his insurance defense attorneys. 

Driver had a 15/30 policy [as small as possible] and really injured the other driver.  Insurance compnay put up its $ 15 and then over and over tried to warn plaintiff that his coverage was too small, and that he had to do something about the situation.  He did not, and although he probably could have added a simple $ 1000 per month for 5 months, ended up with a judgment of $ 150,000 which he has to pay through salary garnishment. 

Of interest are two discussions of the use of expert reports, here, of the attorney expert.  Note: the term net opinion.

"In our review of Nathan's two reports and Nathan's deposition, we find no citation to professional standards or customs as reflected in defense lawyers' journals or articles in support of his opinion that defendants committed legal malpractice. Additionally, Nathan references no judicial or statutory authority establishing the existence of a standard of care for defense attorneys, when the client's monetary exposure over the policy limits places the client in jeopardy of a substantial excess verdict. Instead, other than a recitation of Nathan's own personal opinion as to the standard of care based on his years of experience as a personal injury trial attorney, Nathan relies for his opinion on defense counsel's alleged breach of Rules of Professional Conduct (RPCs) 1.4 (communication), 1.3 (diligence), and 1.1 (gross negligence) as support for his opinion. In Baxt v. Liloia, 155 N.J. 190, 197 (1998), the Court concluded that a violation of the RPCs alone does not give rise to a cause of action for legal malpractice. The reason is that the disciplinary codes were not designed to establish standards for civil liability. Id. at 201; see also Barsotti v. Merced, 346 N.J. Super. 504 (App. Div. 2002).

We are convinced that Judge Stroumtsos in his comprehensive and well reasoned written opinion correctly determined Trivedi's legal malpractice expert's testimony was inadmissible because his testimony constituted a net opinion. See Townsend, supra, 186 N.J. at 494. The court found the expert's opinion was based on his personal beliefs and unsupported by any evidence demonstrating industry standards and customs. See Stoeckel, supra, 387 N.J. Super. at 14. The judge concluded that without an expert opinion establishing the standard of care required of a defense attorney in advising his/her client as to the client's potential personal exposure in the event of a damages verdict in excess of the liability insurance policy limits, Trivedi's claim for legal malpractice could not be proved and that defendants were entitled to judgment as a matter of law. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523-24 (1995)."

This is a car case in which verdict was $ 25,000 for loss of income, $ 20,000 for past pain and suffering and $ 0 for future pain and suffering.  Smelling a problem, plaintniff's attorney asked the court to interview jurors.  One of them was a physical therapist, and plaintiff wanted to show that the jurur used his personal knowledge to find against plaintiff.

Plaintiff gets new trial, but now, loses all loss of income claims because basid non-economic loss not recoverable.  Victory or defeat ?

From this weeks advance sheets:

"Although plaintiff denominated the motion denied by the May 2006 order as one to vacate a default, the dismissal order was not rendered on default within the meaning of CPLR 5015(a)(1), since plaintiff had appeared in opposition to the motions and cross motions to dismiss. Given that plaintiff's motion to vacate was based on evidence that had not previously been submitted to the IAS court, we exercise our discretion, in the interest of justice, to deem that motion to have sought renewal of the dismissal order pursuant to CPLR 2221(e) (see Tishman Constr. Corp. of New York v City of New York, 280 AD2d 374, 376-377 [2001]), and, upon review, we find that the new evidence warranted reinstatement of the complaint. That evidence, including the affirmation of a psychiatrist and the affidavit of a licensed clinical social worker, establishes that plaintiff's former attorney failed to comply with the October 31, 2005 discovery deadline due to panic and anxiety attacks he was suffering as the result of a diagnosed mental illness, combined with other difficulties in functioning caused by a change in the dosage of his psychiatric medication. Since it is undisputed that plaintiff has now provided all required disclosure, and there has been no showing that reinstatement of the complaint will cause any cognizable prejudice to defendants, we decline to impose on plaintiff the drastic penalty of dismissal of the complaint as a sanction for the non-volitional failures of its former attorney related to his mental illness (see Jiminez v St. John's Riverside Hosp., 161 AD2d 497 [1990]). "

"Settlement" was binding after attorney agreed to settle case in court, with City of NY.  The evidence?  Not a transcript, not the client in open court; it was a marking on the "court card" of "settled" made by the clerk. 

This is an expansion of the "settlement in open court" doctrine, which holds that there must be either a writing or an acknowledgement of settlement in open court, on the record.  Here plaintiff wanted to try the case, but was bound by her attorney's apparent although exceeded authority.

"Plaintiff implicitly ratified the settlement by making no formal objection for nearly seven months after being told about it (Clark v Bristol-Myers Squibb & Co., 306 AD2d 82, 85 [2003]). Furthermore, the requirements of CPLR 2104 were met when, following the conference and counsel's acceptance of the settlement, the court clerk updated the court card to read "settled before trial" and marked the case "disposed" in the court's records (Popovic v New York City Health & Hosps. Corp., 180 AD2d 493 [1992]). "

Victoria Kremen suffered unnecessary bilateral mastectomomy, and then legal malpractice, and then bankruptcy, Law.com reports:

"A New York state judge has permitted a legal malpractice suit to proceed against plaintiffs lawyers who allegedly failed to seek a bankruptcy extension for their client, causing her medical malpractice case to be thrown out as untimely.

The article does not make this clear:  why legal malpractice?  A medical malpractice case was brought 1 month after retaining Benedict Morelli's law firm, and took place during/around the bankruptcy.  Is the legal malpractice for allowing the case to be dismissed?

In denying a motion to dismiss the action against law firms Morelli Ratner and Schapiro & Reich, Manhattan Supreme Court Justice Emily Jane Goodman said a combination of equitable estoppel and the U.S. Bankruptcy Code's tolling of statutes of limitations might have saved the underlying lawsuit, even though the medical malpractice at issue took place over a decade ago. "

"The statute of limitations for medical malpractice cases in New York is 2 1/2 years following the malpractice. The trial court dismissed the suit as untimely and rejected the plaintiff's argument that the misdiagnosis had been fraudulently concealed from her. The Appellate Division, 1st Department, upheld the ruling in 2005, finding that Kremen's 25-month delay in bringing an action even after learning of the alleged malpractice in 1999 was "unreasonable as a matter of law."

But Justice Goodman, in Kremen v. Morelli & Associates, 101739/06, said the delay may not have been unreasonable in light of §108 (a) of the Bankruptcy Code, which grants debtors an additional two years to file claims that "applicable nonbankruptcy" laws would otherwise require them to file in the midst of bankruptcy.

The judge said New York's laws on the tolling of statute of limitations law constituted the type of non-bankruptcy law contemplated in the Bankruptcy Code. "

We'll report the case when it is published.

This Appellate Division Case points up how the court  treats just one too many mistakes.  Default, followed by failure to oppose a motion followed by....  The court uses the phrase "pattern of willful default.

"To vacate the order dated February 18, 2005, entered upon the plaintiffs' default in opposing the appellants' motion pursuant to CPLR 3042 and 3126 to dismiss the complaint insofar as asserted against them, the plaintiffs were required to demonstrate both a reasonable excuse for their default and a meritorious cause of action (see CPLR 5015[a][1]; Watson v New York City Tr. Auth., 38 AD3d 532; Echevarria v Waters, 8 AD3d 330, 331). Although the Court may, in its [*2]discretion, accept law office failure as a reasonable excuse (see CPLR 2005; Putney v Pearlman, 203 AD2d 333), "'a pattern of willful default and neglect' should not be excused" (Roussodimou v Zafiriadis, 238 AD2d 568, 569, quoting Gannon v Johnson Scale Co., 189 AD2d 1052). Here, the plaintiffs' attorney's failure to respond to the demand for a bill of particulars, to timely comply with the preliminary conference order dated September 14, 2004, and to oppose the appellants' motion to dismiss the complaint, and his further one-year delay in moving to vacate the order dated February 18, 2005, constituted a pattern of willful default and neglect that cannot be excused (see Diamond v Vitucci, 36 AD3d 650; Amato v Fast Repair, Inc., 15 AD3d 429, 430; Santiago v New York City Health & Hosps. Corp., 10 AD3d 393, 394). Under these circumstances, the Supreme Court improvidently exercised its discretion in granting the plaintiffs' motion to vacate the order dated February 18, 2005, entered upon their default. "

In a recent successful case, plaintiff was a large real estate management company. Plaintiff was involved in a 500 million dollar financing involving 3 NYC downtown buildings. The general counsel asked one of the multiple large firms whether "mortgage spreading" could be used to avoid payment of new mortgage tax. When told "no", the financing continued to closing. At closing it was determined that $1.7 million in mortgage tax could have been legally avoided, contrary to the advice. Prior to jury selection this case settled for $ 900,000.

Attorney malpractice arises in matrimonial settings too. In another recent successful case, Plaintiff -wife had a history of suicide attempts, which were one of the bases of husband's claim of cruel and inhuman treatment. Plaintiff had a history of psychiatric hospitalizations. Days after her release, her attorney and she attended a court hearing on custody, which turned into a settlement of the entire divorce. At the time, she was still on psychotropic medication, and only days out of the in-patient hospitalization. This attorney malpractice matter was settled for $350,000.

Attorney malpractice case arise in unexpected circumstances and may be more vital and valuable than expected. Analysis of the four elements of attorney malpractice is required to determine whether a case exists, and may successfully be prosecuted. As always, the elements are: professional relationship, deviation, proximate cause [including the "but for" element,] and damages.

In this NJ case, [which the NJLJ calls "Bad Bedside Manner"], client has car accident. We'll call him driver 1.  Relative of driver 2 comes to hospital room and gets hired as attorney,  He doesn't tell driver 1 that he is related to Driver 2.

Here is the rest of the case.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1862-05T21862-05T2
MIGUEL HERRERA, Plaintiff-Appellant,
v.
JEFFREY HARK, ESQUIRE,
and HARK & HARK, P.C.,

"These are the salient facts. On or about March 1, 2002, Herrera was the operator of a motor vehicle involved in a collision with a vehicle owned and operated by Vernon Roth, the grandfather of Jeffrey Hark's wife. Herrera was injured and hospitalized. During Herrera's hospitalization, and without his authorization, Hark obtained access to Herrera's hospital room. Despite the fact that Herrera was in severe pain and under the influence of pain medication, Hark induced Herrera to sign a contingency fee agreement. Hark disclosed neither his conflict of interest nor that his conduct in soliciting to be retained under these circumstances was in violation of the Rules of Professional Conduct. RPC 7.3(b)(1); see In re Pajerowski, 156 N.J. 5, 515 (1998) (finding a violation to send runner to accident victims hospital rooms shortly after accident). "

"It is well-settled that a legal malpractice claim is a negligence action brought against an attorney. Kranz v. Tiger, 390 N.J. Super. 135, 147 (App. Div. 2007); Sommers v. McKinney, 287 N.J. Super. 1, 9 (App. Div. 1996). In order to establish legal malpractice, the plaintiff must demonstrate: 1) the existence of an attorney-client relationship creating a duty of care upon the attorney; 2) that the attorney breached the duty owed; 3) that the breach was the proximate cause of any damages sustained; and 4) that actual damages were incurred. Jerista v. Murray, 185 N.J. 175, 190-191 (2005); Conklin v. Hannoch Weisman, 145 N.J. 395, 416 (1996). The law imposes upon the attorney a standard of care to ensure adequate legal needs of the client. Lamb v. Barbour, 188 N.J. Super. 6, 12 (App. Div. 1982), certif. denied, 93 N.J. 297 (1983); Lovett v. Estate of Lovett, 250 N.J. Super. 79, 88 (Ch. Div. 1991). The claim is based on alleged negligence in the practice of law because the attorney did not comply with the requisite standard of care. McGrogan v. Till, 167 N.J. 414, 425 (2001); Carney v. Finn, 145 N.J. Super. 234, 236 (App. Div. 1976).

It is part of the claimant's burden to show that the attorney's negligence proximately caused damages. Davin, L.L.C. v. Daham, 329 N.J. Super. 54, 72 (App. Div. 2000); Lamb, supra, 188 N.J. Super. at 12. That is to say, the negligence of the lawyer must have been a substantial factor in bringing about the loss and in addition some harm must have been foreseeable. Conklin, supra, 145 N.J. at 418-22.

Usually, a legal malpractice trial follows the "trial within a trial" format because the claimant has to show what result would have been obtained, but for the attorney's negligence. Garcia v. Kozlov, Seaton, Romanini & Brooks, P.C., 179 N.J. 343, 358, petition denied, 182 N.J. 151 (2004). At such a trial, "plaintiff has the burden of proving by a preponderance of the evidence that (1) he would have recovered a judgment in the action against the main defendant, (2) the amount of that judgment, and (3) the degree of collectability of such judgment." Garcia, supra, 179 N.J. at 358 (quoting Hoppe v. Ranzini, 158 N.J. Super. 158, 165 (App. Div. 1978)). The plaintiff's damages are the difference between the result sought and the actual result. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001); see Gautam v. De Luca, 215 N.J. Super. 388, 397, certif. denied, 109 N.J. 39 (1987) ("The measure of damages is ordinarily the amount that the client would have received but for his attorney's negligence.").

Here, Herrera has not shown how he would have obtained a better result than the $95,000 settlement, even if Hark had disclosed his conflict of interest. In short, no showing of damages has been made.

We are still concerned by the conduct alleged here; however, disciplinary code violations are not designed to establish standards for civil liability, but rather to provide standards of professional conduct for which lawyers are to be disciplined. Baxt v. Liloia, 155 N.J. 190, 200 (1998). Accordingly, a copy of this opinion will be sent to the Office of Attorney Ethics, for its review and further action if appropriate. "

Interview a represented client?  Wrong!  or perhaps Sometimes Wrong!  or perhaps something else.  Scott Greenfield writes about this evolving question today in his Simple Justice blog.  Making waves in criminal law, testing the limits.  The Tom Liotti story.

From today's NYLJ by Anthony Lin:  Attorney loses case on summary judgment, and tells client that he is not obliged to handle appeal.  Client, chemical company, hires Nathan Dershowitz to handle appeal, which he does.  At appellate level, case settles for $ 250,000. 

Client pays Dershowitz a contingent fee, and original attorney sues client for his contingent fee.  Client inpleads Dershowitz on theory that he did not ascertain whether first attorney was due fees.

Result:  Attorney 1 gets no fee, Legal mal against Dershowitz dismissed.

 "A federal judge in Manhattan has ruled against a lawyer seeking to collect a contingent fee on a case he lost at the trial level but which his client settled after filing an appeal.

Lawyer Barry I. Fredericks represented Chemipal Ltd. in a 2003 suit against weight-loss company Slim-Fast, whose products Chemipal distributed in Israel. Israeli-based Chemipal, which agreed to pay Fredericks $40,000 and a 35 percent contingent fee, claimed Slim-Fast violated its contract with it by not providing adequate marketing and advertising support.

But a federal court in Delaware granted summary judgment to Slim-Fast. Fredericks declined to handle the appeal and Chemipal hired Nathan Z. Dershowitz of Dershowitz, Eiger & Adelson. After the appeal was filed, Chemipal accepted a $250,000 settlement offer.

Fredericks sued Chemipal last year, arguing that his contingent fee arrangement with the company applied to the settlement. But Southern District of New York Judge Gerard E. Lynch granted summary judgment to Chemipal last week, finding that, though Fredericks' argument was plausible, New York law required an ambiguous retainer agreement to be read in favor of the client.

The agreement at issue specified the fees Fredericks would receive in the event of a successful result at the trial level. It also said Fredericks was not obligated to handle the appeal and his contingent fee would not be reduced by the costs necessary to defend a successful result on appeal. But the agreement was silent on the scenario that actually unfolded, with Chemipal losing at trial and recovering after its appeal.

Judge Lynch said Fredericks' argument that the agreement limited his responsibility to the trial level but not his fee was "perfectly reasonable" and the parties would have been free to contract as such. But the judge said the agreement also was open to other interpretations.

"Chemipal's argument that this was an unforeseen contingency, and that the agreement should be read as ending when the case was (temporarily) 'lost' is also not an impossible reading of the parties' intentions," the judge wrote in Fredericks v. Chemipal, Ltd., 06 Civ. 966."

Anthony Davis, writing in the New York Law Journal [subscription] writes of the recent appellate decision concerning the absence of an engagement letter:

"• Failing to Provide an Engagement Letter. In Rubenstein v. Ganea, No. 24483/04, 2007 N.Y. App. Div. LEXIS 4267 (2d Dept. April 3, 2007),  concerning an engagement letter as required by 22 NYCRR 1215.1.

The case presented two issues for determination: "First, . . . whether an attorney who fails to obtain a written retainer agreement or letter of engagement with a non-matrimonial client, in violation of 22 NYCRR 1215.1, may nevertheless recover the reasonable value of professional services rendered on a quantum meruit basis. Second, . . . whether an attorney who was awarded fees in a guardianship proceeding from the allegedly incapacitated person pursuant to Mental Hygiene Law §81.16(f) is barred by res judicata from recovering additional fees from the client who sought the appointment of the guardian."

In April 2002, the defendant, Cynthia Ganea (Ms. Ganea), retained the plaintiff, Seth Rubenstein PC (Mr. Rubenstein), to represent her in a proceeding for her appointment as guardian for her husband, Dinu Andre Ganea, under Mental Hygiene Law article 81. Terms were agreed upon that Mr. Rubenstein would be compensated at a rate of either $450 or $325 per hour, depending on the identity of the attorney performing the work, plus disbursements. The parties also agreed that Mr. Rubenstein's attorney's fees would be reduced by any amount awarded by the judge in the guardianship proceeding paid from the estate of the allegedly incapacitated person, Dinu Andre Ganea (the AIP). It was undisputed that no written retainer agreement or letter of engagement was prepared or executed, notwithstanding that several weeks earlier, 22 NYCRR 1215.1 had become effective.

Mr. Rubenstein then commenced an action on Ms. Ganea's behalf entitled In the Matter of the Application of Cynthea Ganea for the Appointment of a Guardian for Dinu Andre Ganea, an Alleged Incapacitated Person in Supreme Court, Kings County, (the Guardianship Proceeding). 22 NYCRR 1215.1 requires engagement letters explaining the scope of services, fees, billing practices, and the right to arbitration for any representation where the fees are likely to exceed $3,000.

In discussing the proper interpretation of 22 NYCRR 1215.1, the court points out that the provision

contains no express penalty for noncompliance . . . .Indeed, the intent of Rule 1215.1 was not to address abuses in the practice of law, but rather, to prevent misunderstandings about fees that were a frequent source of contention between attorneys and clients. This intent was described by Chief Administrative Judge Jonathan Lippman upon the rule's adoption, that 'this [rule] is not about attorney discipline in any way, shape or form, and we certainly do not expect in any significant degree there to be a large number of disciplinary matters coming out of this rule.' . . . The purpose of the rule therefore is to aid the administration of justice by prodding attorneys to memorialize the terms of their retainer agreements containing basic information regarding fees, billing, and dispute resolution which, in turn, minimizes potential conflicts and misunderstandings between the bar and clientele. (Citations omitted).

The court next explains why Rule 1215.1 should be distinguished from Rule 1400.3, the engagement letter rule that applies to matrimonial cases:

Whereas Rule 1215.1 was not intended to address abuses, Rule 1400.3 was specifically 'promulgated to address abuses in the practice of matrimonial law and to protect the public' . . . . The requirement that attorneys execute written retainer agreements with matrimonial clients is found not only in Rule 1400.3, but also in Code of Professional Responsibility DR 2-106(c)(2)(b), which forbids attorneys from 'collect[ing] . . . any fee in a domestic relations matter . . . unless a written retainer agreement is signed by the lawyer and client' (see 22 NYCRR 1200.11). Predictably, therefore, an attorney's noncompliance with Rule 1400.3 and concomitant breach of Code of Professional Responsibility DR 2-106(c)(2)(b) typically preclude the attorney's recovery of fees in domestic relations matters. Since Rule 1215.1 is not underscored by a specific Disciplinary Rule and is not intended to protect clients against abusive practices, it lacks the 'bite' of 22 NYCRR 1400.3 and Code of Professional Responsibility DR 2-106(c). (Citations omitted).

Lower Court Decisions

The court reviewed the array of lower court decisions on these issues, and noted that these have fallen into three categories:

The first category permits the quantum meruit recovery of attorney's fees notwithstanding noncompliance with 22 NYCRR 1215.1 (Citations omitted) . . . .The second category of cases takes a 'middle ground,' permitting the noncompliant attorney to keep money already received from the client for services, while prohibiting the recovery of additional fees. (Citations omitted) . . . . The third category includes cases from New York, Bronx and Nassau counties, holding that the noncompliance with 22 NYCRR 1215.1 is an absolute bar to recovery of attorney's fees . . . . (Citations omitted) . . . In other words, 'no engagement letter, no fee' (see Davis, 'Engagement Letters: Can't Live Without Them, Can't Change Them,' NYLJ, Jan. 5, 2004, at 3, col 1).

Accordingly, the central holding of the court is that "a strict rule prohibiting the recovery of counsel fees for an attorney's noncompliance with 22 NYCRR 1215.1 is not appropriate and could create unfair windfalls for clients, particularly where clients know that the legal services they receive are not pro bono and where the failure to comply with the rule is not willful." The court notes that its holding would be different were this matter a matrimonial action governed by the more stringent disciplinary requirements of 22 NYCRR 1400.3 and Code of Professional Responsibility DR 2-106(c)(2). However, the Court also points out that

Mr. Rubenstein, as the attorney who failed to properly document the fee agreement in writing as required by 22 NYCRR 1215.1, bears the burden of establishing that the terms of the alleged fee arrangement were fair, fully understood, and agreed to by Ms. Ganea . . . .Providing that Mr. Rubenstein establishes the client's knowing agreement to pay for legal fees not fully compensated by an award from the AIP's estate, Mr. Rubenstein may recover in quantum meruit the fair and reasonable value of the services rendered on behalf of Ms. Ganea prior to his discharge as counsel.

Following a discussion of prior case law, the court also concludes that "the guardianship court's award of reasonable compensation to Mr. Rubenstein pursuant to Mental Hygiene Law 86.16(f) does not bar Mr. Rubenstein's efforts to recover additional fees from Ms. Ganea on a quantum meruit basis. Mr. Rubenstein bears the burden of establishing that he reached a clear agreement with Ms. Ganea that she would be responsible for fees incurred in the guardianship proceeding, including the amount that the fair value of legal services exceeds the amount awarded by the guardianship court. Any misunderstanding or lack of clarity arising from Mr. Rubenstein's failure to provide a letter of engagement or enter into a signed retainer agreement shall be resolved in favor of the client, Ms. Ganea."

Lest the bar treat this decision as some kind of free pass, the court importantly noted that

attorneys continue to have every incentive to comply with 22 NYCRR 1215.1, as compliance establishes in documentary form the fee arrangements to which clients become bound, and which can be enforced through Part 137 arbitration or through court proceedings. Attorneys who fail to heed Rule 1215.1 place themselves at a marked disadvantage, as the recovery of fees becomes dependent upon factors that attorneys do not necessarily control, such as meeting the burden of proving the terms of the retainer and establishing that the terms were fair, understood, and agreed upon. There is never any guarantee that an arbitrator or court will find this burden met or that the fact-finder will determine the reasonable value of services under quantum meruit to be equal to the compensation that would have been earned under a clearly written retainer agreement or letter of engagement. (Emphasis added).

Here is an article from the NYLJ [subscription]:

"High-low agreements in trials for civil damages constitute settlements and should be enforced as such, an appeals court in Brooklyn has ruled in a case of first impression.

A unanimous panel of the Appellate Division, Second Department, ruling in Cunha v. Shapiro, 2006-07880, further concluded that a plaintiff who wants to file a judgment in connection with a high-low agreement must first sign a general release and stipulation of discontinuance, which gives a defendant 21 days to pay an award. Justice Mark C. Dillon (See Profile) wrote the opinion.

The decision will be published Thursday.

High-low agreements set a low and high amount for damages in a civil trial. If a jury awards more than the specified amounts, the plaintiffs accept the high. If the jury awards less, the plaintiff accepts the low. If the jury finds for an in-between amount, that figure is awarded.

In Cunha, Frank Cunha sued Blanche S. Shapiro and the estate of Jesse Shapiro after allegedly sustaining injuries in a minor car accident. Mr. Cunha's attorney, Eitan A. Ogen of Ogen & Associates, said Mr. Cunha needed arthroscopic surgery on his knee as a result of the accident.

Brooklyn Supreme Court Justice Lewis Douglass (See Profile) granted Mr. Cunha's motion for summary judgment in July 2004. The case went to trial for damages in March 2006 before Justice Martin Schneier"

This week we have a raft of Texas Cases  Here attorney was appointed to represent convict father in a parental rights termination case.  Reading the facts, we believe that the court would have terminated the convict's rights anyway, but it was really unhappy about the representation.

"In its opinion, the Court of Appeals noted that Wilson did not put on evidence at the hearing; did not consult with Brice; performed only a "perfunctory cross-examination of Denton," which led to the admission of evidence that Brice had been arrested for harassment, stalking, DWI, indecent exposure, and several cases of indecency with a child; did not request a writ of habeas corpus ad testificandum; did not interview potential witnesses; did not request a jury; and did not investigate the conviction that was the basis for termination. Id. at 140-42. The Court of Appeals also stated, "[N]othing in the record suggests that [Wilson] requested a continuance from the trial court." Id. at 142"

But, nevertheless, the legal malpractice case foundered.  "Brice subsequently filed suit against Wilson for legal malpractice. Brice alleged that Wilson was negligent or grossly negligent in failing to request a continuance; failing to consult with him to determine the facts and prepare a defense; failing to investigate the conviction that was the basis for termination; failing to challenge the pleadings and to present evidence favorable to him; failing to request a writ of habeas corpus ad testificandum; failing to investigate the facts of the case, including the failure to contact Brice's mother and sister, who Brice asserts would have testified on his behalf; and failing to determine that Brice wanted a jury trial. Brice contended that he "suffered the severe damages of not having the effective assistance of counsel at the final hearing on the suit to terminate his parental rights to his two minor children[,]" as well as "physical injuries and the emotional pain and suffering from losing his parental rights to his two minor children." In supplemental petitions, Brice added MacLean, Boulware, and the law partnership of MacLean & Boulware as defendants under theories of agency; negligent hiring, supervision, or retention; and respondeat superior.

The trial court disposition
Wilson, MacLean, and Boulware filed no-evidence motions for summary judgment, in which they asserted that Brice lacked evidence of a breach of duty owed pursuant to the attorney-client relationship, and that Brice had failed to produce any evidence that the alleged breach of duty proximately caused the alleged harm. Brice filed responses, to which he attached copies of the opinion in which the Court of Appeals held that he received ineffective assistance of counsel, a notice from the Supreme Court stating that it had denied review of the case, and a portion of Tex. R. Civ. P. 166a. Brice also filed motions for issuance of a writ of habeas corpus ad testificandum to enable him to appear at the hearings on the motions for summary judgment filed by Wilson, MacLean, and Boulware. The trial court denied Brice's motions for issuance of a writ of habeas corpus ad testificandum. The trial court granted the motions for summary judgment and ordered that Brice take nothing from Wilson, MacLean, and Boulware.

No evidence of damages fatal to claim. The Court of Appeals affirmed the summary judgment, finding that Brice had failed to present evidence of damages, which was an essential element of his legal malpractice claim and of each other claim he presented. "

While diversity of citizenship may be an appropriate base for jurisdiction,  42 USC 1983 is not, at least in Texas  There, the attorney is not a state actor:

"In Combs v. City of Dallas, 3:06-CV-0074-P, 2006 U.S. Dist. Lexis 92445 (N.D. Tex. 2006), the client sought to sue the attorneys who represented him during his state and federal criminal prosecutions. The court held that neither appointed nor retained counsel acts under color of state law in representing a defendant during criminal proceeding. See Polk County v. Dodson, 454 U.S. 312, 324 (1981) (public defender does not act under color of state law when performing a lawyer's traditional functions as counsel to a defendant in a criminal case); Mills v. Criminal Dist. Court No. 3, 837 F.2d 677, 678 (5th Cir. 1988) (court appointed counsel are not official state actors); Russell v. Millsap, 781 F.2d 381, 383 (5th Cir. 1985) (retained counsel does not act under color of state law). The same rationale applies to appointed or retained counsel in a federal criminal case. McLeod v. Knowles, 2006 WL 1738286, *1 (5th Cir. 2006) (unpublished per curiam) (extends Polk County v. Dodson to a Bivens action against court-appointed counsel). As such the conduct of criminal defense attorneys in representing a federal criminal defendant is not cognizable under 42 U.S.C. § 1983 or as a Bivens action.

The client alleged that one of the attorneys had conspired with the prosecutors. Assuming that this sufficiently alleged action under color of law, the court nonetheless found that the legal malpractice claim was barred because it inherently challenged the validity of the client's conviction:

In Heck v. Humphrey, 512 U.S. 477, 486-87 (1994), the Supreme Court held that a party may not maintain a civil rights action based on the legality of a prior criminal proceeding unless a state court or federal habeas court has determined that the terms of confinement are in fact invalid. This rule applies equally to Bivens actions. Stephenson v. Reno, 28 F.3d 26, 27 (5th Cir. 1994). The critical inquiry is whether a judgment in favor of the plaintiff in the civil action would "necessarily imply the invalidity of his conviction or sentence." Heck, 512 U.S. at 486-87. If so, the claim is barred unless the conviction has been reversed or declared invalid. Id.

[. . . Plaintiff's criminal conviction has not been reversed on direct appeal, expunged by executive order, or called into question by a federal writ of habeas corpus. . . . ] "

As in New York, a criminal defendant may not successfully sue his criminal defense attorney absent a showing of "actual innocence"

Here is the Texas rule:

"In Butler v. Mason, No. 11-05-00273-CV, 2006 Tex. App. Lexis 10886 (Tex. App.—Eastland 2006), a convicted murderer attempted to bring a legal malpractice action against the attorney who represented him on direct appeal within the state court system and in state and federal habeas proceedings. The court found that the action was barred by Texas' Peeler doctrine, under which plaintiffs who have been convicted of a criminal offense may negate the sole proximate cause bar to their claim for legal malpractice in connection with that conviction only if they have been exonerated on direct appeal, through post-conviction relief, or otherwise.

In 1998, the jury convicted Butler of murder and aggravated assault. Butler's retained counsel, Harry Zimmerman, perfected an appeal but passed away before oral argument. Mason argued the appeals. Butler later retained Mason to file applications for both state and federal post-conviction writs of habeas corpus. The Texas Court of Criminal Appeals denied the application in 2001. The federal application was dismissed as being time-barred in 2003.

In 2004, Butler filed this suit alleging that Mason was negligent in his handling of the applications for writs of habeas corpus and that Mason breached his contract with Butler. Butler sought a total of $6,000,000 as compensation for lost employment and as punitive damages. The trial court dismissed the case; the court of appeals affirmed:

In Peeler v. Hughes & Luce, 909 S.W.2d 494 (Tex. 1995), the Texas Supreme Court held:

Because of public policy, we side with the majority of courts and hold that plaintiffs who have been convicted of a criminal offense may negate the sole proximate cause bar to their claim for legal malpractice in connection with that conviction only if they have been exonerated on direct appeal, through post-conviction relief, or otherwise. While we agree with the other state courts that public policy prohibits convicts from profiting from their illegal conduct, we also believe that allowing civil recovery for convicts impermissibly shifts responsibility for the crime away from the convict. This opportunity to shift much, if not all, of the punishment assessed against convicts for their criminal acts to their former attorneys, drastically diminishes the consequences of the convicts' criminal conduct and seriously undermines our system of criminal justice. We therefore hold that, as a matter of law, it is the illegal conduct rather than the negligence of a convict's counsel that is the cause in fact of any injuries flowing from the conviction, unless the conviction has been overturned (citation omitted). "

Another Texas case to illustrate the judgment rule in legal malpractice.

"Doing the best you can with what you have is a constant problem in unsettled areas of the law, particularly unsettled areas of statutory construction. Justice Keasler’s concurring opinion in this Court of Criminal Appeals case makes the point:

In Ex parte Chandler, we explained that “a reasonably prudent attorney in Texas is not constitutionally deficient if he relies upon pertinent judicial opinions in assessing the validity of a legal proposition.” Ex parte Chandler, 182 S.W.3d at 358. Moreover, because “‘what an attorney thinks the law is today may not be what a court decides tomorrow[,]’ . . . ‘the rule that an attorney is not liable for an error in judgment on an unsettled proposition of law is universally recognized.’“ Id. (quoting 3 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 18.1, at 2 (5th ed. 2000)). “[C]ounsel’s performance will be measured against the state of the law in effect during the time of trial and we will not find counsel ineffective where the claimed error is based upon unsettled law.” Ex parte Welch, 981 S.W.2d 183, 184 (Tex. Crim. App. 1998) (citing Vaughn v. State, 931 S.W.2d 564, 567 (Tex. Crim. App. 1996)). We also stated that “legal advice which only later proves to be incorrect does not normally fall below the objective standard of reasonableness under Strickland.” Ex parte Chandler, 182 S.W.3d at 359.

Roemer’s counsel’s legal advice was correct at the time he offered it. Counsel relied on the only available opinion dealing with the issue. “[T]he state of the law in effect during the time of trial,” Ex parte Welch, 981 S.W.2d at 184, consisted of a single opinion, which clearly resolved the issue against his client. Counsel thoroughly explained the legal issue and the effect of the court of appeals’ opinion to his client. But the final decision to accept the plea agreement was Roemer’s alone. It could not, therefore, be counsel’s judgment error. Roemer’s counsel’s actions fall squarely within our explanation of effective assistance of counsel in Ex parte Chandler.

Ex parte Roemer, 2007 Tex. Crim. App. Lexis 229 (Tex. Crim. App. 2007) (Keasler, J., concurring, joined by Hervey, J.). "

When a client comes to you to discuss a legal malpractice case, and mentions a bankruptcy, the first question to determine is whether the malpractice might have been pre- or post-petition.  If it was even arguably pre-petition, the bankrupt client must have listed a claim on the schedules.  If not, there can be no legal malpractice case, except by the trustee.

Here is a case from Texas:

"The bankruptcy court in San Antonio has rejected an attempt to bring an unscheduled legal malpractice claim post-confirmation:

It is undisputed that a bankruptcy debtor is required to schedule all assets and that there is a duty to amend which continues throughout the case. It is also undisputed that none of the Debtors scheduled a potential cause of action against Defendant in their bankruptcy schedules, even though Plaintiffs claim that their causes of action relate solely to prepetition conduct of Defendant. Although Plaintiffs contend that Defendant would not have scheduled causes of action against itself, the undisputed evidence shows that Plaintiffs were also represented by counsel other than Defendant at all relevant times. Not only were there outside counsel prior to and at the commencement of the bankruptcy cases, but on June 10, 2004, the Debtors filed an Application to Employ the Law Firm of Langley & Banack as Co-Counsel for the Debtors. The employment of Langley & Banack was approved by this Court's Order on July 15, 2004. The Plan and Disclosure Statement were filed by Langley & Banack on or about December 29, 2004, and the confirmation hearing took place on March 2, 2005. If the directors, officers and non-Defendant attorneys of the Plaintiffs wished to assert claims against Defendant, they had ample opportunity to schedule such an asset and specifically reserve it in the Plan. Instead, a general retention clause was merely placed in the Plan and Disclosure Statement which purported to retain any claims which the Plaintiffs might have against any of their professionals. "

Here is a Texas Case which illustrates the difficulty in plaintiff's summary judgment in legal malpractice.  The court says that expert's affidavit is 'conclusory", but what it really means is that it cannot decide on whether the mistake was all that apparent.

"What “appears” to an expert to be an “inescapable conclusion” is not so apparent to a court. In Tummel & Casso v. Snyder, the lawyers sued to recover fees and the client counterclaimed for legal malpractice. The clients then filed a “traditional” motion for partial summary judgment, alleging that the lawyers had committed legal malpractice in connection with their representation of the clients in two legal matters. Specifically, the clients alleged that appellants committed malpractice by pursuing (on the clients’ behalf) the enforcement of a non-compete agreement against Dr. Michael Sweeney (“the Sweeney litigation”), despite the absence of any chance of successful enforcement because there was no written agreement. Secondly, the clients alleged that the lawyers committed malpractice by filing a lawsuit to protect Dr. Snyder’s right to continue practicing at a surgery center, despite the absence of any chance of success because Dr. Snyder had failed to exhaust his administrative remedies. In support of their motion, the clients attached numerous documents, including copies of the unsigned non-compete agreement. "

The trial court entered summary judgment against the lawyers on the legal malpractice claims. They appealed. The Corpus Christi Court of Appeals reversed, finding the affidavit of the clients’ legal malpractice expert to be conclusory and, thus, insufficient to support summary judgment against the lawyers:

Continuous representation of a client by an attorney allows a law suit within [in NY - 3 years]  a statutory period of time.  That is, the statute of limitations does not kick in until the reprsentation has ended.  When this happens is the subject of many cases.  Here is a Texas case which holds that in a divorce legal malpractice, transactional work on collecting or enforcing the decree does not count as continuous representation.

"'Legal work incident to enforcement of divorce decree does not trigger Hughes tolling rule
This entry was posted on 4/28/2007 9:48 PM and is filed under Limitations and Tolling.

Limitations on a client's claim that she received erroneous legal advice from an attorney that caused her to receive an inadequate share of the marital estate in her divorce decree was not tolled by the Hughes rule, which tolls limitations on a legal malpractice action in some instances of continuous representation. In Brennan v. Manning, No. 07-06-0041-CV, (Tex. App.—Amarillo April 12, 2007), the court found that the lawyer's post-decree work on enforcement issues was not enough to trigger the Hughes tolling rule.

The court first determined when the malpractice claim accrued, applying the legal injury rule to find that the claim accrued when the divorce decree was entered:

Legal malpractice claims are governed by a two year statute of limitations. Tex. Civ. Prac. & Rem.Code Ann. § 16.003(a); Apex Towing Co. v. Tolin, 41 S.W.3d 118, 120 (Tex. 2001). A legal malpractice claim accrues when the legal injury occurs, unless there is a legal basis for tolling limitations. Hughes v. Mahaney & Higgins, 821 S.W.2d 154, 156 (Tex. 1991). Appellant's legal malpractice claim centers upon her allegation that she received an inadequate division of community property when Manning incorrectly advised her that she was not entitled to a share of referral or contingency fees from lawsuits pending at the time of her divorce. Therefore, Appellant's legal malpractice claim accrued when she sustained a legal injury, which would have been at the time the community property was divided by the entry of a decree of divorce. Smith v. McKinney, 792 S.W.2d 740, 742 (Tex. App.—Houston [14th Dist.] 1990, writ denied). "

New York Lawyer [subscription] relates this story:

"Local Lawyer's Conniption Fit at Getting Sued Gets Him Sanctioned

New York Lawyer
May 4, 2007

By Henry Gottlieb
New Jersey Law Journal

When a lawyer is served with a malpractice suit, throwing the complaint on the floor, ejecting the process server for trespassing and yelling "call 911" are possible responses.

But they're wrong, a Mercer County, N.J., judge says in a $403 sanction order against Robert Conroy, one of the state's leading health care lawyers.

Conroy was in his Bridgewater office on March 20, when Guaranteed Subpoena Service Inc. sent a representative to serve a malpractice suit by a doctor Conroy had represented in a complicated transaction.

But Guaranteed reported back to the plaintiff's lawyer: "Not served! Entity was evading service. Threw service at server, stating he was trespassing and would be arrested if he didn't leave."

Conroy says that's not what happened. He says the firm accepted service at the reception desk but the server barged his way into private areas of the office, like a dangerous intruder.

Even so, Superior Court Judge Paul Koenig Jr. found Conroy at fault and called the conduct, "ill-advised, unlawyerlike, and in my opinion, even outrageous."

"He chose to intimidate the process server, someone who works, you know, in close connection with the attorneys to serve court process and court papers," the judge said in an April 11 ruling. "Any attorney should not take such a position, however unhappy he is with the circumstances."

"He's a licensed attorney," the judge continued. "He has an obligation to act professionally. Throwing documents -- throwing court documents doesn't sound professional."

Reported today from Bankruptcy Court:

In re: Ernst, 04-12291
Decided: April 27, 2007

"UNDER A retainer agreement allowing interest on unpaid fees, the lawyer providing legal services to the debtor brought a state action to collect $72,274 in unpaid legal fees from the debtor and his wife. Shortly after entry of an award in the lawyer's favor, the debtors sought Chapter 13 bankruptcy protection. In disallowing the attorney-creditor's claim for fees incurred in collecting on the debtors' bill, the bankruptcy court noted that the Appellate Division, First Department in Ween v. Dow held that fees associated with the collection of unpaid legal fees could not be recovered by an attorney unless the applicable retainer agreement also gave the client the right to recover attorney fees. In Travelers Casualty & Surety Co. of America v. Pacific Gas & Electric Co. the U.S. Supreme Court emphasized the requirement that bankruptcy courts consult state law in determining the validity of most claims. In rejecting the lawyer's claim, the bankruptcy court noted that the Ween court emphatically declared that a retainer provision identical that used by the lawyer was unenforceable.

"This decision granting summary judgment to the Debtors on their claim objection and disallowing a claim by an attorney-creditor for fees incurred in collecting a bill owed by his former client relies heavily on two recent case law developments - the first in the Appellate Division of the New York State Supreme Court holding that claims such as this one are not enforceable and the second decided last month by the United States Supreme Court emphasizing the requirement that bankruptcy courts consult state law in determining the validity of most claims. Both decisions involve the same underlying subject matter - the contractual right of an attorney to recover counsel fees from a third party. When considered together, these cases compel granting Debtors' Motion for Summary Judgment and disallowing the attorney-creditor's claim. "

Thomas Liotti, who has of late been pushing the bounds of criminal defendant representation, and has, incidently, sued the Nassau County DA, is in the news for an inventive investigation. 

His client was accused of abusing a child.  The child and its parents were the subject of a neglect proceeding in Family Court, and Liotti used that proceeding to generate statements exonorating his criminal defendant.  Result?  Lots of outrage.

From the NYLJ

"A Nassau judge has declined to disqualify from a criminal case a defense attorney who took statements from prosecution witnesses without the permission or presence of their attorneys in a related Family Court matter. In November 2005, the prosecutor filed an information charging Mr. Quiroz, 54, of Freeport, with abusing a 16-year-old retarded girl. Mr. Liotti denied that the girl was retarded.

In February 2006, the Nassau County Department of Social Services brought a neglect motion in Family Court against the alleged victim's mother. The county also commenced a proceeding against Mr. Quiroz. Mr. Liotti served as Mr. Quiroz's attorney in both matters.

Family Court appointed Steven Herman, a solo practitioner in Rockville Center, as law guardian to represent the girl and Connie Gonzalez, of Legal Aid in Hempstead, to represent the mother.

On Oct. 16, 2006, Mr. Liotti wrote to the district attorney asking that the criminal charges against his client be dismissed. He submitted affidavits, dated Oct. 12, in which the girl recanted her accusation and the mother stated that the alleged incident could not have occurred.

Judge Kluewer said that the record "amply demonstrated" that Mr. Liotti did not get the consent of either Mr. Herman or Ms. Gonzalez before communicating with their clients.

Mr. Herman moved in Family Court to disqualify Mr. Liotti on the grounds he had violated DR 7-104 of the state's Code of Professional Responsibility. That provision prohibits an attorney from communicating with an opposing party that the attorney knows to be represented by counsel, unless the attorney has secured the prior consent of the opposing party's counsel.

Mr. Herman also sought to preclude the use of the statements.

Judge Hope S. Zimmerman, now an acting Supreme Court justice (See Profile), ruled that Mr. Liotti had violated the alleged victim's due process rights and disqualified him from representing Mr. Quiroz in Family Court.

Mr. Liotti appealed to the Appellate Division, Second Department, which has stayed the Family Court order pending the resolution of the criminal matter.

Meanwhile, the district attorney's office moved for virtually identical relief in District Court. It argued that Mr. Liotti should be disqualified in light of his attempted use of "improper communications" to seek a dismissal of the criminal matter. Further, the district attorney asserted that it would be contrary to the interest of justice to allow the "product of this improper conduct" to be used.

The prosecutor also suggested that Mr. Liotti might have to appear as a witness "in order to determine the genuineness and circumstances of the purported recantations."

In response, Mr. Liotti argued that neither the girl nor her mother were a "party" to the criminal case. He noted that the girl has turned 18 and was no longer entitled to representation by the law guardian.

Mr. Liotti also claimed that because his associates, and not him personally, appeared in Family Court, he was "not aware" that the girl and her mother had counsel.

Judge Kluewer said she was not persuaded by Mr. Liotti's assertions that he did not know that counsel represented the girl and her mother.

"Given his experience, he certainly should have known of the representation, and neither he nor his associates should have communicated either with the alleged victim, or her mother without the consent of their respective attorneys," Judge Kluewer said.

But the judge agreed that neither the girl nor her mother was a party to the criminal action. And she said that the purposes of the two proceedings were different.

The aim of the criminal action was to determine if the defendant had committed a wrongful act and, if so, to assess blame and impose punishment, the judge said. In that context, a defense attorney is obliged to zealously represent his client and is authorized to conduct the "broadest possible range of pretrial investigation."

By contrast, the Family Court proceeding is essentially civil, Judge Kluewer said. "The real subject of a neglect petition is not the respondent against whom it is brought, but the child it concerns," she said.

The judge noted that the considerations underlying the Family Court ruling did not pertain to the matter before her. But she said that the prosecutor apparently was seeking to punish Mr. Liotti because of factors relevant to the Family Court proceeding.

"I am aware of no public policy or other consideration pertinent to this action that warrants interfering with Defendant's fundamental, albeit not absolute, right to counsel of his own choosing," Judge Kluewer held.

She also declined to preclude statements Mr. Liotti obtained from the alleged victim and her mother.

"Apart from the fact that such a spectre implicates the constitutional right to confront the people's witnesses with prior inconsistent statements in New York, exclusion of a statement is not an appropriate remedy for the misconduct about which the people complain," she said. "

Wife obtained a judgment against her divorcing husband for $ 750,000.  Her attorney took his time entering the judgment, and violated 22 NYCRR 202.48(a), which provides 60 days after the entry of an order directing settlement of the judgment to submit a proposed judgment.  Holding?  Plaintiff loses her judgment!

Farkas v Farkas
2007 NY Slip Op 03762
Decided on May 1, 2007
Appellate Division, First Department

"The Court of Appeals has recently made it clear that "statutory time frames - like court-ordered time frames - are not options, they are requirements, to be taken seriously by the parties" (Miceli v State Farm Mut. Auto. Ins. Co., 3 NY3d 725, 726 [2004] [citation omitted], following Brill v City of New York, 2 NY3d 648 [2004]). Thus, where a statute or court rule prescribes a limited time frame in which to take a procedural step in litigation, and states that a party's failure to act within that time frame will be excused only upon a showing of "good cause," such a showing requires demonstrating, as the dissent puts it, "more . . . than [the] merit . . . [of] the underlying application and a lack of prejudice to the other party." This bench is unanimous in holding that this principle applies in the instant case, in which plaintiff failed to comply with the 60-day time frame for the submission of a judgment to the court for signature (Uniform Rules for Trial Cts [22 NYCRR]
§ 202.48[a], [b]). Because plaintiff has failed to show good cause for her failure to comply with the time frame set forth in the Uniform Rules, we are constrained to reverse and vacate the judgment. "

For the entire case.

Legal malpractice is sometimes just about missing a deadline.  Sometimes its just about being lazy.  One recurrent theme is attorneys taking on a field in which they do not understand the subtle problems.  Here is an example:

"One of the Prohibited Words is the phrase “prior art”. There is no reason whatsoever for the words “prior art” to appear in any patent application. Making any characterization of prior art is opening an avenue for attacking an issued patent and may unnecessarily complicate patent prosecution.

When someone cites “prior art” in a patent, they are making some characterization or drawing a comparison to what they think the prior art may be. In order to attack the patent, it may be possible to show that the prior art was actually something different or could be characterized in a completely different manner. This could lead to rendering the patent invalid through inequitable conduct, or at least show the patent in a bad light in front of a (non-technical) judge and jury who are hearing the case.

Characterizing prior art may complicate prosecution because an Examiner may take exception to your assertion that the prior art is one thing while the Examiner may characterize the same text as another thing. I don’t know if using any of the Prohibited Words rises to the level of legal malpractice, but overuse or sloppy use of terminology does indicate a low level of proficiency in patent drafting. My very first patent application, written without the help of a patent attorney or agent, was replete with the Prohibited Words. "

Here, from the subscription Chicago Daily News is a snippet in which a high ranking Illinois State Police official has sued the State Attorney General for a sloppy defense of a trooper, or so the short blurb implies. 

 "An Illinois state police colonel has filed a legal-malpractice lawsuit against the state attorney general and two of her assistants alleging that they failed to adequately represent the officer in a federal case. "

If you have a subscription, read on.  Send me the story.

Its a concept rarely seen or heard, and even more rarely invoked because of the county, not country where the law suit is brought.  Guess?  The law firm is defending itself in this legal malpractice case, and has a little too much time on its hands.

The Madison County Record, a newspaper which frequently features news about legal malpractice reports:

"The Illinois Appellate Court in Mt. Vernon unanimously affirmed St. Clair County Circuit Judge Lloyd Cueto's decision to deny a motion to dismiss a legal malpractice case pursuant to the doctrine of forum non conveniens.

Rick Rosen and the Rosen Law Firm had argued to Cueto that St. Clair County was an inappropriate forum for Ivan Brant's professional negligence and fraud claims arising from the defendants' representation of the plaintiff.

Rosen and his law firm are both reside in St. Clair County.

Brant filed a six-count complaint against Rosen, the law firm, and a third defendant, Dwight Hardin, who is employed as a consultant by Rosen's firm.

He alleged that he retained Rosen and the law firm to represent him in his Federal Employers' Liability Act (FELA) for damages against his employer, Union Pacific Railroad, for injuries he received during the course of his employment.

Brant alleged that both Rosen and Hardin told him that they were licensed, practicing attorneys, even though Hardin allegedly was not an attorney.

Brant alleged Rosen and Hardin negligently "instructed and counseled" him to settle his FELA case against the railroad for less than its fair value, failed to conduct an adequate investigation into the liability and damage evidence, and settled his case without filing suit or conducting any discovery and before he attained maximum medical improvement.

He also alleged that he received substantially less in settlement for his case than it was worth and, therefore, "suffered significant damages in the form of inappropriate compensation for past and future medical expenses, past and future wages, pain, suffering, disability and disfigurement."

In addition to the professional negligence claims, Brant also claimed that each defendant was guilty of fraud because Rosen, individually and through the law firm and Hardin made several untrue statements.

According to Brant, he was told that he was required to accept Union Pacific's settlement offer of $150,000 or be forced to accept $20,000 and relocate to Utah as a security guard. "

Closely akin to legal malpractice, here an Iowa County defends its sheriff's negligence in process service.  In New York, the attorney may be held responsible for the process server's negligence.  Here the county is defendant:

"Douglas County might have to pay a hefty price for an employee's failure to deliver.

The county finds itself as the defendant in a medical malpractice lawsuit because, contrary to a civil process server's contention, the original defendant was never served papers.

Eugenia Kudym of Omaha is asking for $450,000 in damages -- the amount her attorney said she could have recovered from her physician after she suffered complications from gastric bypass surgery in 2003.

A judge last year ruled that a server from the sheriff's department did not properly serve Kudym's physician. Meanwhile, the statute of limitations for malpractice lapsed, eliminating the physician from possibly having to pay damages. "

For the county to be held liable, Blakeman must prove malpractice occurred and that the county's error cost Kudym the opportunity to seek damages from the physician.

"The more difficult side is proving the medical malpractice claim," Blakeman said Monday. "The fact the judge has decided (the county) didn't successfully serve the doctor sits in our favor. In essence, it's been determined that the county didn't perform."

It's not strictly legal malpractice, but rather use of the term as a metaphor.  Federal Magistrate Judge alleges its "almost" legal malpractice when a Federal prosecutor acts to leverage his case. 

"Charges against the lead suspect in a major federal drug case should be dismissed because of trial delays caused by prosecutors, a federal magistrate judge has recommended.

The recommendation, which the U.S. Attorney’s Office disputes, would have to be accepted by U.S. District Judge Rebecca Doherty before the case against George Celestine is dismissed.

Celestine, who could face up to life in prison if convicted, was indicted with three other men in what prosecutors allege was a drug ring they operated for 10 years moving cocaine from Houston to Lafayette.

The men were initially charged in 2001, and the case has stretched on for more than five years and spawned three mistrials.

The most recent was in June, when a judge questioned Assistant U.S. Attorney Todd Clemons’ apparent non-compliance with an order to provide defense attorneys with a list of un-indicted coconspirators — people allegedly involved in the drug ring who were going to testify against Celestine.

Doherty had ordered Clemons to hand over a list of the names in 2003 but he did not comply until the morning of the third trial in June, according to the U.S. Magistrate Judge C. Michael Hill’s report and recommendation for dismissal.

Hill wrote that the failure to hand over the names resulted in mistrials that have violated Celestine’s Sixth Amendment right to a speedy trial.

Hill characterized Clemons’ actions as falling somewhere between “bad faith” and “legal negligence” and appeared to be an attempt to gain a tactical trial advantage at the expense of not following a court order. "

Attorneys performing work for which there can be no liability ?  Immunity from being sued ?  When and why would this be permitted ?

Law guardians, selected by a judge, assigned to a child, supposed to protect the kid's rights often do a wonderful job.  However, the field of legal malpractice is devoted to the fringe group of poor performers.  Does this social policy of immunity held or hinder the social policy of protecting children?

This article from Kentucky thinks not:

"A recently released report on legal representation for foster children gave Kentucky a "D" for the representation it provides to abused and neglected children, according to officials from Kentucky Youth Advocates.

First Star, a national child advocacy organization based in Washington, issued the report, giving grades to states based on mandates for representation, training requirements, children's involvement in proceedings and attorney immunity from malpractice.

Kentucky was one of six states to receive a "D" grade based on a 100-point index; 15 states received failing grades. Kentucky received a score of 60 out of 100. Neighboring states received a range of grades. Illinois, Indiana, and Missouri were given failing grades, Ohio received a C, Tennessee got a B, and West Virginia got an A.

The group made recommendations to the Kentucky legislature that included developing training for attorneys, requiring that children keep the same attorney if possible, and giving children the right to legal representation during the appeals process.

The First Star report also recommended that children's attorneys have caseload and compensation levels that allow for "effective assistance of counsel."

"While Kentucky guarantees attorneys for children in its child welfare system, the issue of quality representation is simply not adequately addressed," said Dr. Terry Brooks, executive director of Kentucky Youth Advocates. "At a broad level, we can do more to support the quality issue through proactive legislation in 2008 and a focused commitment from the legal profession. On a pragmatic basis, issues like increasing fees for court-appointed attorneys are imperative if we really want to tackle the quality issue."

Paul et al. v. Smith, Gambrell & Russell, et al., ___S.E.2d___, 2007 WL 474185 (Ga. App. 2007) .  Hinshaw report tells us:

"The Georgia Court of Appeals held that the plaintiffs’ proof of a malpractice claim based on alleged inadequate witness preparation could not prevail because the plaintiffs had not provided sufficient evidence that the outcome of the case giving rise to the malpractice claim would have been more favorable but for the alleged malpractice. With regard to a separate claim, however, the court held that the clients’ review prior to signing of on an allegedly negligently drafted corporate document did not give rise to a defense to a malpractice claim where, as here, the legal significance of the document was not sufficiently clear to the clients"

Malpractice is a professional's failure to use minimally adequate levels of care, skill or diligence in the performance of the professional's duties, causing harm to another. In New York, attorney malpractice is defined as a "deviation from good and accepted legal practice, where the client has been proximately damaged by that deviation, but for which, there would have been a different, better or more positive outcome."

The first element of a relationship between the client and the professional was previously discussed. The second element, deviation, is shown by evidence, not necessarily expert, which shows that the acts of the professional fell so below the good and accepted practice of law in New York, that a jury would be permitted to find that the acts below standard.

Expert testimony is necessary when the deviation is subtle; an example could be the failure to supply an affidavit of merits to restore a case marked off calendar, the failure to respond to a CPLR 3216 notice, or failures in response to a motion for summary judgment. Expert testimony is not always necessary however. None is needed to demonstrate the deviation in failing to file within the statute of limitations. Bad outcome do not necessarily equal a deviation. Furthermore, questions of judgment of strategic choice cannot serve as the basis of malpractice. An attorney is permitted the reasonable choice of strategy, if supported by acceptable reasoning. The strategic choice must be reasonable both objectively and subjectively. The difference between strategic choice and mistake are subtle, and create the most difficult cases.

The third element of proximate cause encompasses both the typical analysis that arises in all negligence litigation and the additional element of "but for." The plaintiff must demonstrate not only that the deviation was a substantial cause of the poor outcome, but must additionally show that "but for" the deviation there would have been a different, better or more positive outcome. An example of this potential difficulty arises in an automobile accident. No matter how many deviations are shown, it may be that the maximum insurance for the other driver limits the recovery. If that is true, it will be impossible to show that "but for" the deviation, more than the policy limit was available and could have been recovered from the defendant.

This Article from Kim at the Daily News:

"Rotten lawyers face raft of raps in ripoffs
NY DAILY NEWS

Sunday, April 29th 2007, 4:00 AM

Meet some of New York's lousiest lawyers.

One spent $131,000 of his clients' money on vacations, jewelry, lingerie and home improvement.

Another charged 76 clients $11,500 each for filing a simple application that should have cost no more than $700.

And a third deceived an elderly couple into investing their life savings - $222,000 - in a suspect real estate deal.

All three lawyers are among the scores of attorneys cited for misconduct last year by judges of the Appellate Division of State Supreme Court. None has been disbarred.

Individual client losses range from as little as $500 to more than $6 million, according to cases ruled on last year.

"The elderly and immigrants are among those preyed upon by some attorneys, but there are plenty of wealthy victims and businessmen as well," said Thomas Cahill, chief counsel for the Disciplinary Committee of the division's 1st Department, which covers Manhattan and the Bronx.

The public record of the court's discipline begins with censure, a reprimand that goes on the lawyer's record but does not prohibit the lawyer from practicing.

One attorney censured last year was Ronald Sims, of Hackettstown, N.J., who was cited for "repeatedly touching and pinching his secretary's buttocks, attempting to kiss her, and grabbing her hand and hip," according to court documents.

Sims declined to return telephone calls.

"Some of the lawyers we come across are in a state of denial," said Cahill, who is the chief prosecutor of attorney misconduct in Manhattan and the Bronx.

"We hear all kinds of excuses for their actions. Pre-traumatic stress syndrome was one. Of course that's impossible, but I'm not kidding. Another lawyer said, 'I got depressed because I found out I was adopted late in life,' and he had a therapist come in and testify that he was severely depressed," said Cahill.

But invariably, Cahill said, greed, gambling or substance abuse are the major causes of severe misconduct by lawyers.

"I have heard the 'Park Ave.' or 'Great Neck' defense, where they say they needed the money to maintain a certain lifestyle," said Cahill.

His office, which polices the 76,777 lawyers in Manhattan and the Bronx, has a staff that includes 20 full-time attorneys, many of whom are former prosecutors, investigators, an accountant and paralegals.

It handles about 3,500 matters a year in a complex process that begins with screening of complaints.

Out of that total, however, only a small number result in penalties for attorneys, not because the office is lax, but rather because many consumer complaints fall outside its mandate.

The Daily News reviewed the records of some 300 disciplinary proceedings.

Most ripoffs by attorneys involve theft from escrow accounts and trusts and estates or billing for work that wasn't done, according to an analysis by the state Lawyers Fund for Client Protection.

"In a real estate practice you have large pools of money in your accounts at various times, and some lawyers dip their hands in," said Steven Krane, a former president of the state Bar Association.

Here are some of the lousiest of the lousy:

Pizza shop owners say lawyer took a big slice

Chase Caro, 48, of White Plains, who practices in Manhattan and Westchester County, represented Frank and Francesca Salvi when they sold their restaurant, Francesca Pizza and Pasta, in Shrub Oak. The price was $354,900, but the Salvis didn't get the money. Instead, Caro deposited $319,000 of the funds into his business account, according to a Disciplinary Committee investigation. Another check for the remaining $35,900, is still being traced.

The probe, which led to Caro's suspension, also found he deposited $470,143.05 into his business account from the sale of a Peekskill home owned by Herbert Newkirk, 70.

Newkirk received a worthless check.

"It bounced," said Newkirk, a widower. "Insufficient funds. Caro didn't do anything but swindle me."

"One third of my practice is pro bono," Caro said. "I'm sure when I get my chance to put my side of the story out, I'll be exonerated."

Money mess

Frank DeGrasse, 46, of North Salem, with offices in Westchester County and the Bronx, is accused of mishandling a divorce matter, mishandling escrow money, commingling funds, negligence in real estate matters, and failure to pay taxes.

Investigators found DeGrasse also improperly deposited clients' escrow money in his personal account, and spent $131,000 at gas stations, Circuit City, The Athlete's Foot, restaurants, gym clubs, Home Depot, Frederick's of Hollywood and Bailey Banks & Biddle, a jewelry store.

"I went to him for an uncontested divorce. I paid him $500," said Tawanna Arnold, of Newburgh, Orange County. "He didn't follow through. Then I went to his office, sat there and waited for him. I called him a lot of times, but he never showed up and never returned the calls."

DeGrasse has not responded to phone calls, letters or subpoenas from the Disciplinary Committee. On Nov. 9, he was suspended from practice.

Last month, in a separate matter, DeGrasse pleaded guilty in Suffolk County Supreme Court to participating in a $750,000 mortgage scam.

'Shocking disregard'

Barry Spiegler, 67, of New City, Rockland County, was suspended from practice on Aug. 3 pending further disciplinary proceedings. He allegedly misappropriated $27,000 in estate funds in one case and did no work for a $10,000 fee in another.

Spiegler has a "shocking disregard for the judicial system" and "threatens the public interest," the Appellate Court judges wrote. He still hasn't responded to the Disciplinary Committee nor did he return phone calls from The News.

Corner of conflict

Over a four-year period, Suzanne Drysdale, 40, of Flatbush Ave., Brooklyn, represented approximately 200 clients buying real estate. In what the Appellate Court judges called "an impermissible conflict of interest," she had her clients buy title services at a company next door that she also owned. Drysdale declined comment.

Jewel of the guile

Lawrence Newman, 60, with offices on Third Ave., in Manhattan, specialized in recovering money on claims filed with insurance companies. He had many clients in the Diamond District, including Rakesh Barmecha, who complained to the Disciplinary Committee that Newman owed him $127,000, part of an insurance claim payment in escrow for gems that were stolen.

A committee audit of a relevant 10 months' activity in Newman's escrow account showed "disbursements totalling more than $1.3 million, the majority of which ($1 million) were checks issued by respondent to himself." But apparently there was no money for Barmecha.

In the end, investigators found "uncontested evidence of misappropriation of $320,000." On Oct. 10, Newman was suspended pending further action by the court.

Newman declined comment. Meanwhile, Barmecha said eventually he got his $127,000 in a complicated arrangement. "But it cost me $25,000 to get what was owed me. Believe me, it was a learning experience," he said.

Clients left high and dry

Linda Stanch, 53, formerly of Manhattan, now living somewhere in the Midwest, worked as an attorney for the city Corporation Counsel's office and then opened her own practice. In 2003, she ran unsuccessfully for Manhattan Civil Court judge in the Democratic primary.

On Oct. 17, Stanch was suspended from practice after telling the Disciplinary Committee she abandoned six clients because she was "the victim of stalking and harassment by an ex-boyfriend whom she feared could still harm her," according to court documents.

She also said that she had been "diagnosed with depression and anxiety."

For months - even while she still lived in Manhattan - she had ignored the committee's phone calls, letters and subpoenas. Finally, she wrote the committee that her mother had bought her a plane ticket so she could leave town with her children. "

Divorce attorney sues for legal fees and applies a retainer which has a legal fee for collection provision.  In a rare instance, attorney loses all around:

"Reisman, Peirez & Reisman LLP v. Gazzara, 2823/02
Decided: March 30, 2007

"In this action plaintiff law firm seeks to collect unpaid attorneys fees for services performed for the defendant in a matrimonial action. According to the Complaint, plaintiff law firm provided legal services beginning August 9, 1999 and continuing through April, 2001. It further alleges that on or about April 30, 2001 plaintiff served upon defendant a Notice to Arbitrate package pursuant to the Rules of the Chief Administrator, 22 NYCRR §136.5, but defendant has never filed a request to arbitrate. Plaintiff contends that it is owed $30,538.20 plus expenses of $1,263.26 plus interest in outstanding legal fees.

In its Complaint plaintiff asserts four causes of action seeking the $30,538.20 plus interest and fees, under the theories of breach of contract, payment for services performed, account stated, and quantum meruit. In its Fifth cause of action it also seeks reasonable attorneys fees in having to prosecute this claim, as it claims it is expressly permitted pursuant to the retainer agreement between the parties.

Defendant Answer consists of general denials and five defenses, including failure to state a claim, breach of contract in failing to obtain the divorce, false billing, and negligent prosecution of the underlying matrimonial action.

Plaintiff claims that the general denials and claims contained in the defendant's Answer do not raise a triable issue of fact with respect to defendant's liability for the sums sought. Further, the firm claims that now that discovery and the depositions of the parties have been completed, there is no question of fact preventing summary judgment on its behalf.

Account Stated

The plaintiff's Second cause of action seeks to recover on an account stated theory. Attorneys fees may be recovered on the basis on an account stated. (Bartning v. Bartning, 16 AD3d 249 [1st Dept, 2005]). Insofar as the rules of the Chief Administrator of the Courts provide for the arbitration of fee disputes (22 NYCRR §136.5), they pose no obstacle to a plenary action where, as here, the Complaint alleges compliance with the requirement of that the client receive notice of the client's arbitration rights and further alleges that there has been a failure upon the part of the client to request arbitration. (Idid., contrast Lewis & Merit v. Smith, 170 Misc2d 192 [Sup. Ct. Nas., 1996]).

The common law elements of a cause of action for an account stated are: the existence of a debtor-creditor relationship, a mutual examination of the claims of the respective parties, the striking of a balance, and an agreement, express or implied, that the party against whom the balance is struck will pay the debt. (Bank of New York v. Santarelli, 128 Misc2d 1003 [County. Ct., Greene, 1985]). The rationale for permitting a recovery on an account stated theory is that the parties have, by their conduct, evidenced an agreement upon the balance of an indebtedness. (Interman v. R. S. M. Electron Power, 37 NY2d 151, 153-154 (1975)). In Newburger-Morris Co. v. Talcott (219 N.Y. 505, 512 (1916) Judge Cardozo wrote;

"There is no doubt that an account stated may sometimes result from the retention of accounts current without objection (citations omitted). But the result does not always follow. It varies with the circumstances that surround the submission of the statements (citations omitted) and those circumstances include, of course the relation between the parties."

Among the circumstances to be considered is whether an objection has been made to the account within a reasonable time. (Interman v. R. S. M. Electron Power, supra at 154; see, Corr v. Hoffman, 256 N.Y. 254, 267 (1931)).

The plaintiff offers copies of what are represented to be monthly statements sent to defendant commencing Oct. 25, 1999 and continuing through April 25, 2001. During her pretrial deposition Defendant acknowledged receiving monthly invoices reflecting the work performed by plaintiff law firm. (Deposition of Nancy Gazzara, page 27). However, because defendant had given a deposit of $10,000 with the retainer, the first statement to show a balance due was that of Aug. 25. 2001. Monthly bills showing a balance due were sent each month thereafter through April of 2001. However, the deposition of Seymour J. Reisman on behalf of plaintiff gave rise to some doubt as to the accuracy of the proffered statements and whether they were the statements actually sent to defendant.

Defendant avers that after receiving the Jan. 25, 2001 invoice she telephone Lanny Greenberg, an associate with Reisman, Peirez & Reisman, and then met with her at the law office. Defendant claims that she was advised that, "monies for attorneys' fees would be advanced and collected at the time of settlement." Defendant also asserts without a time frame that she complained about "excessive charges" to Ms. Greenberg who referred her to Mr. Reisman. Defendant claims that repeated efforts to see Mr. Reisman were unavailing. Defendant also makes a specific challenge to a $1,5000 item on the Mar. 25, 2001 statement identified as time spent drafting and revising a stipulation of settlement.

The court has been provided with a copy of a letter dated May 12, 2001, sent to a prior Justice upon the Plaintiff's application to be relieved. In that letter, in addition to the contentions just discussed, defendant challenges an item on the April 25, 2001 statement for a meeting she had with plaintiff solely to discuss fees and billing for a second deposition she claims was unnecessary.

While it is uncontested that there was a retainer agreement and an attorney-client relationship in which plaintiff provided professional services, nevertheless there are material issues of fact which preclude the granting of summary judgment. There was no history of defendant paying statements on receipt. (See, Paul, Weiss, Rifkind, Wharton & Garrison v. Koons, 4 Misc3d 447 [Sup. Ct., New York County, 2004]; Milstein v. Montefiore Club, 47 AD2d 805 [4th Dept, 1975]). Nor is it claimed that Defendant made any partial payments. (See, Parker Chapin Flattau & Klimpl v. Daelen Corp., 59 AD2d 375 [1st Dept, 1977]). Whether, under the circumstances of this case, a delay of five months before challenging the statement of account was reasonable, is a question of fact. The excerpts of the defendant's pretrial deposition which plaintiff cites may be admissions and may perhaps be used for impeachment purposes at trial, but they are insufficient to support a granting of summary judgment. (Knepka v. Tallman, 278 AD2d 811 [2d Dept, 2000]).

Moreover, as will be discussed in greater detail hereinafter, Defendant raises an issue as to whether plaintiff is precluded from recovering any fee because of a failure to comply with the filing requirements of 22 NYCRR §1400.3. For present purposes it suffices to note, " . . . [E]ven an unpleaded defense may be invoked to defeat a summary judgment motion or serve as the basis of for an affirmative grant of such relief in the absence of surprise and prejudice, provided the opposing party has a full opportunity to respond (citations omitted)." (Sheils v. County of Fulton, 14 AD3d 919, 921 [3d Dept, 2005]).

Plaintiff's Claim for Attorney's Fees

Plaintiff's Fifth cause of action seeks to recover reasonable costs and attorneys fees incurred in seeking to collect under the Retainer Agreement. Page 3 of the Retainer Agreement states; "Bills not paid within 30 days will accrue interest at the legal rate (presently nine [9 percent]), and you will be liable for reasonable attorneys' fees for the collection of said sum." (Emphasis supplied). Absent a provision for a reciprocal allowance for attorneys' fees to the client should he or she prevail, such a provision is unenforceable as lacking in mutuality and fundamentally unfair. (Ween & Associates v. Dow, 35 AD3d 58 [3d Dept, 2006]). A unilateral provision as in this retainer agreement has also been faulted because of its "distinct potential for silencing a client's complaint about fees for fear of retaliation for the nonpayment of even unreasonable fees (citations omitted)." (id. at 63).

Filing Requirement of 22 NYCRR §1400.3

The Defendant contends that she is entitled to summary judgment dismissing all of plaintiff's claims for recovery because of an alleged failure to comply with the requirement of 22 NYCRR §1400.3 that a copy of the retainer agreement be filed with the court. That rule requires in pertinent part; "Where substitution of counsel occurs after the filing of the net worth statement, a signed copy of the attorney's retainer shall be filed with the court within 10 days of its execution. Here the retainer agreement bears a date of Aug. 9, 1999. At his deposition Seymour J. Reisman testified that he assumed that the retainer agreement was filed with the Court and that it was certainly filed with the motion for pendente lite relief that his firm made during the period it represented defendant.

While an attorney who does not comply with 22 NYCRR §1400.3 "is precluded from seeking fees from his or her client," a fee may nevertheless be recovered "where there is substantial compliance . . . ??." (Mulcahy v. Mulcahy, 285 AD2d 587, 588 [2d Dept, 2001]). Generally, the finding of a lack of substantial compliance has been based upon a complete, nearly complete or flagrant disregard for the applicable rules. (See, Sherman v. Sherman, 34 AD3d 670 [2d Dept, 2006]; Wegman v. Wegman, 8 AD3d 263 [2d Dept, 2004]; Mulcahy v. Mulcahy, supra). On the other hand, a technical violation which does not undermine the underlying policy of protecting the public from known abuses in the field of matrimonial law will not prevent a recovery. (Gross v. Gross, 36 AD3d 318 [2d Dept, 2006]). Here it has not been clearly established whether or when the retainer agreement was filed with the court.

Plaintiff argues that Defendant's failure to plead such a defense constitutes a waiver any claim of noncompliance with applicable matrimonial rules. Because the matrimonial rules were promulgated to address abuses in the practice of matrimonial law, a failure to comply gives rise to a "preclusion" of the attorney from recovering a fee, rather than a defense. (Julien v. Machson, 245 AD2d 122 [1st Dept, 1997]). It would appear contrary to the policy underlying the rules to find a waiver particularly where the issue arises before trial and any prejudice may be avoided. Even defenses waived under CPLR 3211 (e) may be interposed in an amended answer absent surprise or prejudice resulting from the delay. (Nunez v. Mousouros, 21 AD3d 355, 256 [2d Dept, 2005]). And, as noted above, an unpleaded defense may defeat summary judgment or support reverse summary judgment absent genuine surprise or prejudice and provided there is a full opportunity to litigate the issue. (Sheils v. County of Fulton, 14 AD3d 919, 921 [3d Dept, 2005]).

The Facts surrounding the filing of the retainer agreement and the accuracy and issuance of statements of account to defendant are not sufficiently clear to permit a summary disposition. As to plaintiff's First, Second and Fourth causes of action issues of fact including not only the question of substantial compliance with the matrimonial rules, but also as to the extent and value of the services provided require trial.

Both motions for summary judgment are denied except that Plaintiff's Fifth cause of action seeking fees and disbursement pursuant to the Retainer Agreement in connection with its effort to collect for services rendered. Defendant's motion for summary judgment  it is so ordered."

The Kentucky Divorce Law Journal reports this legal malpractice case. Baker v. Coombs  Here is the DLJ's analysis:

"Baker filed for divorce from her husband, Collins, in 1989. A divorce decree, which referenced their Property Settlement Agreement, was entered in 1990. As part of the Agreement, Collins agreed to pay Baker $500,000. A balloon payment of $300,000 was due by January 1, 2002 and the remaining $200,000 due in ten annual installments of $20,000 continuing through January 1, 2001. The Agreement also provided that if the balloon payment was paid prior to the due date, the other payments would be forgiven. As security for the payments, Baker was given liens on all of Collin’s stock holdings of closely held corporations. Collin was to “execute all necessary documents to effectuate these liens” and “the Certificates shall be held by Ronald Coombs, Attorney.” Coombs represented Collins in the divorce proceedings and in other matters.
Despite the Agreement, Collins never gave Coombs any stock certificates before Collins died in September 1999. Coombs asked Collins for the certificates, but Collins never delivered them. Shortly before Collin’s death, Baker discovered that he had sold his interest in his largest corporation in 1992 without perfecting a lien in his stock holdings and making the agreed upon transfer to Baker. Baker did not know what happened to the other corporations, but none of them were listed as assets of his estate. Baker did not know whether any liens were ever prepared and she could not recall inquiring as to the liens or certificates prior to Collin’s death.
In November 1999, Baker filed a proof of claim against Collin’s estate for monies owed to her under the Agreement. The estate objected. Therefore in December 1999, she filed a complaint against the estate, Collin’s widow, and Coombs. Baker alleged that properties were transferred out of Collin’s name, prior to his death, in a deliberate attempt to prevent the payment of monies he owed to her and to reduce the inheritance of his child. She also alleged that Coombs failed to follow the terms of the Agreement in not holding the stock certificates and allowing Collin’s to sell his businesses without taking action to assure that Baker be paid what she was owed.
Baker was awarded a judgment against the estate. Baker and Coombs then filed cross motions for summary judgment. The trial court concluded that Coombs did not commit professional negligence and that he was not personally liable for the monies Collins owed Baker. The court held that Coombs signed the Agreement only in his capacity as Collin’s counsel, and not as a party to the Agreement. Therefore, only Collins and his estate could be held liable. Baker appealed.

Analysis:

On appeal Baker argued: 1) Coombs placed himself in the position of becoming a fiduciary to her by agreeing to hold the stock certificates, and 2) she should be deemed a third party beneficiary of Coomb’s legal services because he agreed to hold the stock certificates as security for the payments owed to her. Baker argued that, under both theories, Coombs had an affirmative obligation to obtain the stock certificates from Collins, to compel Collins to provide them, or to advise Baker that he had not obtained them.
Regarding Baker’s argument that Coombs owed her a fiduciary duty as a result of being mentioned in the Agreement, the Court first noted that no such duty arose solely from the fact that Coombs signed the Agreement. CR 11 requires that attorneys sign pleadings. Next, the Court noted that in the Agreement Coombs, in effect, designated himself as a de facto escrow agent on behalf of Baker as to the certificates, despite his representation of Collins. Coombs created the appearance that a fiduciary duty might have arisen. However, after examining the literal language of the Agreement, the Court found that Coombs was obligated to hold and secure the certificates only after they were placed in his possession. Coombs had no affirmative duty to obtain the certificates or notify anyone that he was not in possession of them. Since Coombs never took possession of the certificates, his arguable duty to Baker never arose. It remained inchoate and unenforceable. If he had received the certificates, he would have been obligated to Baker for having voluntarily agreed to assume the fiduciary duties attached to holding the certificates.
Regarding Baker’s second argument, the Court noted that a legal malpractice claim may arise only to the attorney’s client. However, an attorney may still be liable to a third party because of events arising out of his representation of a client if the attorney’s acts are fraudulent or tortuous and result in injury to that third person. Liability may be found where the attorney is responsible for damage caused by his negligence to someone intended to be benefited by his actions regardless of any lack of privity. The Court found that absent willful and wanton conduct, fraud, or malice, Coombs owed no duty of care to Baker as a third party beneficiary since Coombs had a contractual obligation to represent Collins against Baker as the adverse party in the divorce proceedings.
The Court observed that Coombs became involved in a situation which had the potential to create a conflict of interest between him and his client. The Court warned that attorneys should review SCR 3.130, Rule 1.7 before taking similar steps and obtain prior clear consent from the parties if they choose to embark on an analogous course to preclude similar litigation.
Affirmed. "

This story tells us about a NJ Police officer and wife who have a legal malpractice case proceeding:

"Suspended Roxbury Police Sgt. Richard Winstock and his wife, Jennifer, have gone on the attack by filing a legal malpractice lawsuit that accuses a Ridgewood attorney of giving them shoddy advice about a social club they opened in Dover in 2004.

The club, in a warehouse on Richboynton Road, was raided as an alleged illegal poker casino two years ago -- April 29 into April 30, 2005. By August 2005, the Winstocks, Roxbury Officer Thomas "TJ" Juskus and three others were indicted on charges that include official misconduct and maintaining a gambling resort.

The Winstocks' lawsuit, obtained by the Daily Record, is ready to be filed on Monday by attorney Gabriel H. Halpern in Superior Court in Morristown to comply with a two-year statute of limitations that corresponds with the raid. It accuses attorney Amato Galasso of negligence, incompetence and breach of duty in the advice he gave the Winstocks about the legality of the club.

Richard Winstock was suspended "

From the AP:

"Alexander T. Harvey has a choice to make before the end of next month: apologize for skipping out on jury duty or serve 30 days behind bars.

During questioning last week in court in Fremont, Neb., by attorneys to determine the jury makeup for a three-day civil trial, Harvey asked to be excused to go to the restroom. When told he would have to wait, Harvey got up and left the courtroom -- never to return.

"The court was not amused," Harvey said.

A few days later, Harvey was subpoenaed back to the court, where Judge John Samson told him he had until May 21 to write an apology letter or turn himself in.

"They take fulfilling your complete jury duty very seriously," said Harvey, 51. "It was my mistake and I shouldn't have done that, and I'm going to write the apology."

Harvey gave a number of reasons why he didn't think he was going to make the jury: He said he knew the plaintiff in the case and said he didn't like the way an attorney was questioning him.

But he said he's learned his lesson.

"It's not certainly a landmark case but it was an education," he said. "

Here is the website from this Press Release seen today:

"A new Website includes documents from actual cases and legal actions taken against lawyers. This information should be, but is not, readily accessible to the public. The Web site aims to educate viewers about choosing an attorney -- through research.

Raleigh, NC (PRWEB) April 27, 2007 -- An unusual new Website, LousyLawyer.info, is not a gripe site but an educational tool for consumers who need to hire lawyers.

LousyLawyer.info includes lists of lawyers disciplined by various state bar associations, sued for malpractice, and/or indicted on criminal charges. Viewers can click links to the legal documents that support this information.

The Website is an example of the type of research consumers need to do before hiring a lawyer. Consumer advocate and author Gloria Grening Wolk failed to do this research on her own behalf, when she hired a lawyer recommended by another attorney. Now she is suing an attorney who she claims extorted money from her.

"I learned the hard way," said Wolk, who used research to help another victim of lawyers find a competent, trustworthy attorney in another state. "

Judicial Reports tells the tale of a 4 time elevator plaintiff who eventually lost and then sued his attorneys.  The case doesn't come right out and say it, but:

"The plaintiff allegedly was injured in several elevator accidents at his place of employment. An action to recover damages for personal injuries was commenced against the companies that maintained the elevators. In the instant action, the complaint alleges, inter alia, that the defendants Wallace & Minchenberg, Fred Wallace, individually and as a member of Wallace & Minchenberg, and Alfred Minchenberg, individually and as a member of Wallace & Minchenberg (hereinafter the defendants), the attorneys who commenced the underlying personal injury action, committed legal malpractice by failing to properly prosecute the action.

Judicial Reports is more explicit: "Bennett A. Cohen kept getting hurt in elevators — or so he claimed. The lawyers he hired to exact compensation from the culprits responsible for the injuries he allegedly sustained in four elevator mishaps between 1989 and 1992 must have suspected that their litigious client might eventually turn on them, as he did. When the last of the elevator tort claims collapsed, Cohen sued the law firm for malpractice for allegedly mishandling his slam-dunk tort suits. Kings County Justice Lawrence Knipel apparently wasn’t in any hurry to unhitch the lawyers from the petard that they had theretofore been carrying on their former client’s behalf.

Knipel denied the lawyers' motion to dismiss Cohen’s claims against them, leaving it to the Appellate Division to put an end to it. A unanimous appellate panel concluded that the law firm, Wallace & Minchenberg, can’t be held accountable for failing to vigorously prosecute the personal injury actions because they had no chance of succeeding. The evidence they produced in support of Cohen’s claims stemming from the first three accidents failed to show that the elevator maintenance companies were aware of problems but let them go unfixed, the appellate judges observed, reversing Knipel and dismissing Cohen’s claims related to those cases.

Cohen’s malpractice claim stemming from the fourth alleged accident was filed against the law firm long after the three-year statute of limitations had expired. Knipel should have dismissed that claim on that account, the Appellate Division said. Cohen v. Wallace & Minchenberg (April 17) "

Try to figure out the tangled web in this land - real estate - develepoment - municipal case taking place in Texas. "The law firm of Godwin Pappas Ronquillo LLP, representing the City of Celina, filed a lawsuit on April 19 against the defendants Robert Brown and Brown and Hofmeister LLP.

In the lawsuit between Pilot Point and Celina regarding annexation of the Talley Ranch, Brown was representing the City of Pilot Point. In January of 2007, Judge Bruce McFarling disqualified Brown, Brown and Hofmeister LLP, and attorney Mark Goldstucker from the lawsuit due to conflicts of interest. In the lawsuit recently filed against Brown and his firm, Celina is holding Brown and Brown and Hofmeister LLP liable for legal malpractice.

“The lawyer that was negotiating with Talley Ranch on behalf of Pilot Point (Robert Brown) is the same lawyer that was helping Celina on their annexation,” said David LaBrec, Celina’s attorney in Celina v. Pilot Point. “My client felt as if it was a conflict for Mr. Brown, and I felt like it was a conflict. Celina moved to disqualify him, and that was very expensive. Now (Brown and Hofmeister LLP) have been disqualified, so we’re prepared to move forward with the litigation.”

The Court of Appeals decided two interesting legal malpractice cases today.  AmBase v. Davis Polk is one and Rudolph v. Shayne Dachs is the second. Rudolph is interesting on at least two counts.

In this case plaintiff was injured as a pedestrian.  Defendant law firm asked for the wrong jury instruction, and as a result plaintiff won, but was seriously hit with comparative liability.  He hired new counsel, got a new trial on the basis of the wrong jury instruction, and settled the case for about 15X the amount.

He sued in legal malpractice asking for two things:  the attorney fees to fix the first trial, with the repeat costs of the second trial [experts, etc].  On this he won.  The second thing he asked for was interest on the difference between the first recovery and the second recovery from the date of  trial 1.  On this he lost.

The decision is interesting for two items:  The Court of Appeals fleshed out what expenses may be recoverable "in an attempt to avoid, minimizev or reduce the damage caused by attorney wrongful conduct", citing DePinto v. Rosenthal & Curry and Baker v. Dorfman.

The court also left open what  and whether predecision interest may be recoverable in legal malpractice in its last footnote.

This case, in which DP represented AmBase Corp. involved litigation in a tax matter.  AmBase sued DP on the theory that it never owed taxes, and DP failed to represent it carefully.  Supreme Court, New York County dismissed the case, the AD 1 affirmed, the Court of Appeals granted leave to appeal, and then affirmed,  Joel Stashenko of Law Com writes:

"Davis Polk was retained in 1992 to represent AmBase in a dispute over about $20 million in federal withholding taxes the Internal Revenue Service sought from the company for 1979 through 1985. In May 2001, the U.S. Tax Court ruled that AmBase owed none of the money sought by the IRS.

Though it won the tax case, AmBase balked when Davis Polk submitted a bill for a $1,424,104 "success fee" that was provided for in the retainer agreement between the company and the firm. The fee was calculated at 150 percent of Davis Polk's billed time, subject to a $2 million cap. AmBase filed a legal malpractice claim and sought to have Davis Polk return previously paid legal fees.

It contended that Davis Polk should have informed the company sooner that it did not appear AmBase would be liable for any of the taxes sought by the IRS. AmBase argued that its financial condition was weakened, and its economic opportunities were limited, because it had to carry a large loss reserve for years on the possibility that it could lose the tax case.

Both Manhattan Supreme Court Justice Louis B. York and the Appellate Division, 1st Department, in AmBase Corporation v. Davis Polk & Wardwell, 30 A.D. 3d 171, 172 (2006), dismissed the complaint. Both lower courts, like the Court of Appeals on Thursday, found AmBase's contention that it suffered from the lack of earlier notice it was probably off the hook for the tax bill "purely speculative" and an insufficient basis for a legal malpractice claim.

In AmBase Corp. v. Davis Polk & Wardwell, 51, Judge Carmen Beauchamp Ciparick wrote Thursday that Davis Polk "exercised the ordinary reasonable skill and knowledge commonly possessed by a member of a legal profession" as established under McCoy v. Feinman, 99 N.Y. 2d 295, 301-302 (2002). "

From the W Va Record: "CHARLESTON - A Kanawha County attorney is being sued by his former clients who claim he failed to file their lawsuit within the statute of limitations period.

Dayton Price and Suzan Price named Stephen P. Swisher as defendant in a lawsuit filed April 11 in Kanawha Circuit Court.

The Prices were married at the time, but are currently separated.

According to the suit, Swisher was retained by the Prices after Dayton Price was in an accident at the Lowe's store in Nitro on April 15, 2003.

"Despite being cognizant of the date of Mr. Price's injury, (Swisher) failed to effectively preserve and/or pursue plaintiffs' underlying claims by filing a civil action for such claims within the applicable statute of limitations period," the suit states.

The Prices claims Swisher did not file the suit in an attempt to conceal or erase the error to further their detriment, the suit says.

From Law Com:

"Popular belief, at least in medical communities, holds that juries in medical malpractice cases tend to side with plaintiffs, even where the case against a doctor is a weak one.

But jurors actually tend to believe doctors more than they do plaintiffs, says a law professor who examined numerous data on medical malpractice litigation, including cases in New Jersey.

Philip Peters Jr., of the University of Missouri-Columbia School of Law, concluded that juries treat doctors favorably, "perhaps unfairly so," and are more likely than even fellow physicians to defer to a doctor's opinion.

Peters found that most malpractice suits end in defense verdicts, and that the cases that go to trial tend to be the weakest ones, since those with strong evidence usually settle before trial.

In an examination of win rates, Peters found that 27 percent to 30 percent of filed medical malpractice suits end in a plaintiff's verdict, the lowest success rate of any type of tort litigation.

Peters researched the data to test the assumption that juries lack capacity to evaluate medical malpractice suits fairly -- an assumption implicit in legislation pending in Congress that would create specialized courts for such cases.

"Politicians and critics of jury performance should think twice before concluding that doctors will be treated more favorably in health courts," wrote Peters, whose report will be published in May in the Michigan Law Review. "

Legal and medical malpractice share roots, histories and are both about professional shortcomings.  Do they share this attribute too?

The end of the relationship can come from any number of reasons, but the end is reached either before or at the end of the underlying litigation.

<strong>Termination by client</strong>

It is the general rule in the United States, and the rule in New York that an attorney's representation of a client may be terminated at any time by the client, either for good cause or for no cause. Analysis of a client's termination of the attorney's retention [hereinafter "termination"] starts with determination of whether the termination was for good cause or for no cause.

While the difference between "for cause, good cause, or cause" for termination and "no cause" has been endlessly debated, a "for cause" termination may be based upon misconduct which manifestly does not rise to the level of attorney malpractice.

<strong>Where the discharge is for
cause,the attorney has no
right to compensation</strong>

Where the discharge is for cause, the attorney has no right to compensation. This rule exists regardless of the terms of a retainer or other agreement between the attorney and the client. Traditional contract principles are not always applied to govern disputes between attorneys and clients.

Where the discharge is for cause, the attorney has no right to compensation or a retaining lien, regardless of pleading or stated defenses. "This rule is well calculated to promote public confidence in the members of an honorable profession whose relation to their clients is personal and confidential." "An attorney discharged for cause has no right to a fee or a retaining lien."

<strong>Where the discharge is without
cause, the attorney is limited
to recovering in quantum meruit</strong>

"When an attorney is discharged without cause, the attorney is entitled to recover compensation from the client measured by the fair and reasonable value of the services rendered whether that be more or less than the amount provided in the contract or retainer agreement." This rule, set forth by the Court of Appeals exists as a matter of law, whether pled or not, and whether set forth as an affirmative defense or not.

Where the discharge is without cause, the attorney is limited to recovering in quantum meruit the reasonable value of the services rendered. The courts clearly "possess the traditional authority to "supervise the charging of fees for legal services," pursuant to their "inherent and statutory power to regulate the practice of law."

<em>Quantum meruit</em> means "as much as he deserved, and is premised upon the finding of an implied promise to pay as much as he reasonable deserved." If it is determined that the termination was without cause, recovery should be determined to be an amount which "they reasonably deserved."

The Court of Appeals has found that where the discharge is without cause, as a matter of law, the attorney is limited to recovering the reasonable value of the services rendered, in quantum meruit.

"<strong>Cause" is not the
equivalent of "malpractice"</strong>

Good cause for termination is not the same as malpractice. Attorney malpractice, defined as a deviation from good and accepted practice, which proximately damaged the party, in which, but for the negligence of the attorney there would have been a different or better result is not the same as good cause for termination.

<strong>"Termination for cause"</strong> has arisen in many situations in which malpractice was not even discussed, much less claimed. For example, substantial delays in prosecuting the case or failing to bring the action until 2 days before the statute of limitations is sufficient; failure timely to obtain medical records is similarly sufficient .

Failure to retain an expert is similarly sufficient . "Employment [which] contravenes specific legal requirements is sufficient, as is abandonment of a case, ; or a conflict of interest; a refusal personally to try a case ; or a failure to disclose a settlement offer are all these examples misconduct which resulted in termination for cause, with no fee to the attorney. They do not amount to malpractice, however.

Termination for cause threshold lies well below any question of malpractice. As an example, Dagny Management Corp.,supra, is instructive. Friction between the client and the attorney grew over the management of the settlement funds, in which the attorneys frustrated, but did not destroy, the settlement. The Appellate Division determined that the "firm's interference with the client's right to settle constitutes misconduct sufficient to rise to a level warranting discharge for cause and forfeiture of its fee", citing De Luccia v. Village of Monroe, 180 AD2d 897 [3d Dept, 1992]

The difference flows logically from the question of damages is that in malpractice there is a positive claim for damages, over and above fee considerations from attorneys; in the question of termination for cause, there can be but a reduction of the fees paid, but no positive claim for damages. The heightened burden for malpractice logically accompanies the heightened possibility of damages.

It is the general rule in the United States, and New York that the client, either for good cause or for no cause, may terminate an attorney's representation at any time. While the difference between "for cause" and "no cause" has been endlessly debated, a "for cause" termination may be based upon misconduct which does not rise to the level of attorney malpractice.

Where the discharge is for cause, the attorney has no right to compensation, regardless of the agreement between the attorney and the client. Traditional contract principles are not always applied to govern disputes between attorneys and clients. Where the discharge is for cause, the attorney has no right to compensation or a retaining lien. When discharged without good cause, compensation is measured by the fair and reasonable value of the services rendered whether that is more or less than the amount provided in the contract or retainer agreement. The attorney is limited to recovering in <em>quantum meruit</em>.

The courts possess authority to supervise fees for legal services. Quantum meruit means, "as much as he deserved, premised upon an implied promise to pay as much as reasonable. Put in short, quantum meruit is the fair and reasonable value of the services rendered, which may be more or less than the amount provided in the contract or retainer agreement. It is determined by taking into consideration the character of the services, the nature and importance of the litigation, the degree of responsibility, the amount or value involved, the length of time spent, the ability, skill and experience required, the character, qualifications and standing of the attorney and the results achieved. The recovery is not limited to the amount billed or the original terms of the retainer agreement, and may be less or more than the amount, which might have been recovered under a contingency fee.

Attorney malpractice arises in matrimonial settings too. In another recent successful case, Plaintiff -wife had a history of suicide attempts, which were one of the bases of husband's claim of cruel and inhuman treatment. Plaintiff had a history of psychiatric hospitalizations. Days after her release, her attorney and she attended a court hearing on custody, which turned into a settlement of the entire divorce. At the time, she was still on psychotropic medication, and only days out of the in-patient hospitalization. This attorney malpractice matter was settled for $350,000.

Attorney malpractice case arise in unexpected circumstances and may be more vital and valuable than expected. Analysis of the four elements of attorney malpractice is required to determine whether a case exists, and may successfully be prosecuted. As always, the elements are: professional relationship, deviation, proximate cause [including the "but for" element,] and damages.

The City of New York, the Health & Hosptials Corporation, individual hospitals.  The ownership and place of service of a summons and complaint, as well as a notice of medical malpractice have long been a trap for the unwary.

NOTE:  The New York Law Journal reports that "starting April 30, 2007 service of process and notice of claims must be filed in Room 650 at 346 Broadway at the new HHC Office of Legal Affairs Medical Litigation Unit."

Don't serve the notice or the summons in the wrong place!

Here is a Florida case whcih discusses the obligation between attorneys on a fee split, and the difference between an attorney split and a fee owed by the client.  Here, attorney 1 referred the case to attorney 2, and was then terminated.  Result?  Attorney 2 owes a specific percentage to Attorney 1.

"An appellate court has ruled that two Miami lawyers should split a contingency fee award based on their written fee agreement -- even though one lawyer was fired by the client on the advice of the other lawyer before the case was won.

A 4th District Court of Appeal panel unanimously ruled April 2 that Scott Jay, who referred a legal malpractice case to Warren Trazenfeld, is entitled to 25 percent of the $218,000 fee Trazenfeld won as part of a $485,000 judgment in Broward Circuit Court in 2003.

Trazenfeld had argued that Jay was not entitled to any fees because he thought that when his client terminated Jay, the fee agreement was voided. Jay's only claim, he said, was based on quantum meruit, meaning that payment should be based on the reasonable value of services provided. But Jay was not even entitled to that, Trazenfeld said, because Jay had not kept complete time records of his work.

Broward Circuit Judge Robert Lance Andrews agreed with Trazenfeld. But the 4th DCA panel rejected that argument. First, it said case precedent holds that the quantum meruit rule was inapplicable because it applies to the client's obligation, not to co-counsel's obligation.

"The written fee agreement provides that co-counsel are jointly owed the fee," the panel wrote. "And because the contract did not specify otherwise, the division of the fee would ordinarily be equal."

The panel also rejected Trazenfeld's argument about the time records.

"Here, where the fee agreement effectually makes the division, it would serve no purpose to keep such records to establish the share of each," the panel wrote. "In this kind of joint representation, counsel may recognize from the beginning of their undertaking that the amount of time spent by either will not control the division. … As long as such a division is not unreasonable and does not violate the regulatory rules of the Florida Bar, there is no good reason why courts should resort to time records to divide the fee."

Read this:

"After a Preston Hollow, Texas, neighbor complained that his son's pet donkey was a loud nuisance, Dallas lawyer C. Gregory Shamoun brought the donkey, known as Buddy, into a courtroom on Wednesday to attempt to prove to a jury that the burro's not. When the suit went to trial on Wednesday, Buddy was the first witness.

Although Buddy clearly couldn't testify, Shamoun says he wanted the jury to see that Buddy is his 7-year-old son's well-behaved pet.

Cantrell's attorney, Chandler, confirms that Buddy wasn't noisy in the courtroom.

"The donkey did behave. It was a nice donkey, as donkeys go, I suppose," says Chandler, of Chandler & Chandler in Dallas.

Seider says he allowed Buddy to appear in court as a witness, because Cantrell had pleaded in his counterclaim that Buddy was a nuisance.

"He behaved perfectly. They led him in, and the jury observed him for a minute or two, and then he went peaceably away," Seider says, adding that Shamoun assured him that if Buddy made a mess in the courtroom, he would clean it up. "

Here is a legal malpractice case in which it is alleged that defendant attorney spoke with the upcoming judge at at coctail party, and was told that the judge would let plaintiff have only 5 days of trial.  As a result, it is alleged that plaintiff settled the case rather than try it in so short a period?

Unthinkable?  "Four years after Cox Smith Matthews settled a suit on behalf of plaintiff Total Clean LLC for $4.5 million, the firm is defending itself in a case brought by its former client. Total Clean, a family business established to operate a truck wash, has sued the San Antonio-based firm and one of its shareholders in Bexar County, Texas' 37th District Court. At a mediation held five days before the trial, McElhaney allegedly told Nami family members "that they had to settle the case because they could not effectively go to trial with the five-day trial limitation," according to the petition. "Believing McElhaney that the federal judge would permit Total Clean to put on only a small part of its case, and therefore essentially prevent it from effectively putting on its case, the family agreed to settle. ... "

"We are alleging that the lawyer [McElhaney] told the client that the judge said he would only permit a very short trial and that is why [the client] settled," says Smoot. "My client is adamant. He [Bobby Nami] would not have settled except for the fact that he was told he would only have a five-day trial."

If you think that this is a unique case, take a look at Totura v. Sullivan Papain Block now before the AD2, AD No. 2006-3886  fully briefed.  The allegation there is that the attorney told his client the judge spoke at a bar meeting and told him to settle or face dismissal at trial.

This case falls in the "just can''t explain it" category.

Attorney represents plaintiff and obviously had problems.  Client sues attorney in legal malpractice, and attorney defaults on trial.  He then defaults on inquest of which he had notice.  He then fails to do anything about a settled judgment.

Only after entry of judgment does he try to vacate.  His efforts unsuccesful.  "After the defendant failed to appear on the scheduled trial date, he was notified that the case would be placed on the calendar one week later for an inquest on damages. Moreover, after the defendant's efforts to vacate his defaults proved unsuccessful, he was given notice, on or about April 13, 2004, that judgment would be entered against him on or after May 1, 2004. Under these circumstances, the defendant has no grounds to complain of lack of notice pursuant to CPLR 3215(g)(1).

Finally, the court properly determined that the judgment was not entered in violation of 22 NYCRR 202.48(a) (see Funk v Barry, 89 NY2d 364). "

Here is a reported case in which the case against defendant was dismissed after openings.  This occurrence is rare, rare, rare.  Worse yet, plaintiff suffered complete dismissal at the end of plaintiff's case.  What was counsel doing and thinking??

"Plaintiff's opening statement failed to make out a prima facie case of negligence against the driver of the car involved in the alleged accident. Therefore, there could have been no finding of liability against the car's owner, defendant Diaz, since any liability on his part would have been derivative of the driver's (Vehicle and Traffic Law § 388[1]). Accordingly, the court properly dismissed the action as against Diaz immediately after opening statements (see Giroux v Snedecor, 178 AD2d 802 [1991]).

The complaint against the City was properly dismissed at the close of evidence. Even if the City created the bump to which plaintiff attributes the accident in which he was injured, there was no competent evidence that the bump was hazardous at the time of its creation (see Bielecki v City of New York, 14 AD3d 301 [2005]). The trial court properly precluded the testimony of plaintiff's expert, since there was no showing that the proposed testimony would clarify an issue [*2]involving professional or technical knowledge beyond the ken of the typical juror (see GMAC Commercial Credit v Mitchell-B.J. Ltd., 272 AD2d 51 [2000]).

Plaintiff in this personal injury action litigated it correctly right up to trial.  However, it then fell completely apart.  Trial attorney hired about a week prior to trial, and was not exactly ready.  Request for an adjournment denied, case dismissed.  The decision places the fault squarely with plaintiff's attorney.  Is this Legal Malpractice?

"Whether to grant an adjournment is a matter within the discretion of the trial court (see Matter of Steven B., 6 NY3d 888, 889 [2006]). Although there is no indication of delay by plaintiff in the litigation of this matter until the day of trial, it remains that neither plaintiff's counsel of record nor plaintiff's newly retained trial counsel provided the court or the defense with advance notice of plaintiff's purported inability to proceed to trial on the appointed date, and instead, submitted, on the day of the scheduled trial, an affidavit of engagement that admittedly contained misstatements of fact. Not only did plaintiff's counsel of record act contrary to the mandate of 22 NYCRR § 202.31 by retaining outside trial counsel fewer than 10 days before the trial was to begin, but the attorney retained was clearly not prepared to try the matter on the scheduled date. In view of counsel's noncompliance with 22 NYCRR § 202.31 and the trial attorney's false representations to the court, we cannot say that the trial court improvidently exercised its discretion in denying plaintiff an adjournment and, when plaintiff refused to proceed, dismissing the action for failure to prosecute"

This case illustrates two things:  real estate leases in commercial transactions can have great consequences, and, a contract cause of action for legal malpractice can succeed hugely.

"A lawyer who is now with Montgomery McCracken Walker & Rhoads was hit with a legal malpractice verdict of more than $6.6 million in a suit brought against her and her former firm by a corporate real estate client that said her poor drafting of a lease agreement sparked a lawsuit in California that cost $4 million to settle.

In his verdict from a nonjury trial, Judge Mark I. Bernstein of Philadelphia's Commerce Court ruled that attorney Karen Senser and Segre & Senser must reimburse Crown Cork & Seal the $4 million it paid to settle the California suit, as well as more than $972,000 in attorney fees and $1.6 million in interest.

Bernstein's one-page ruling included no discussion of the case, but simply announced his verdict and damages awards totaling $6,643,054.

Crown had initially filed suit against both Senser and her partner, Nina Segre, as well as Montgomery McCracken. But in pretrial rulings, 1st Judicial District President Judge C. Darnell Jones II dismissed Segre from the suit and ruled that all claims against Montgomery McCracken were barred on statute of limitations grounds. Jones also dismissed all claims of breach of fiduciary duty and negligence-based malpractice claims.

As a result, the case went to trial only on a contract-based malpractice claim against Senser and her former firm.

Our Outside Counsel column in today's NYLJ is on "The Defense of Collectibility in Legal Malpractice"

Here is a portion.  For the entire article, see today's NYLJ:

The Defense of 'Collectibility' in Legal Malpractice

By Andrew Lavoott Bluestone
New York Law Journal
April 20, 2007

One of the many wrinkles in legal malpractice, which in some ways is a body of law unto itself, is the defense of collectibilty.

Simply put, it is the defense that even if successful, plaintiff might not have been able to collect a hypothetical judgment from the defendant. In no other field of law is plaintiff required to prove that collection can be had at the end of litigation. Pyrrhic victories are elsewhere permitted, and plaintiffs often face uncertainty of reward in other fields of law.

There is a split between departments in New York over who bears the burden of proving collectibilty or noncollectibilty. This article will describe the issue and the split.

In order to establish a prima facie case of legal malpractice, it must be shown that the defendant attorney deviated from good and accepted practice ["failed to exercise the degree of skill commonly exercised by an ordinary member of the legal community"] and that plaintiff-client sustained actual, real, measurable damages as a proximate result of the deviations by the defendant attorney.

Hinshaw writes today about a federal worker's compensation attorney fee issue which applies to all attorney fee disputes:  block billing and 1/4 hour minimum billing, both of which led to a reduction by the court:

"Brief Summary
The Ninth Circuit reviewed the guidelines applicable to court-awarded attorney fees in ERISA litigation. Among other things, the court upheld a 20 percent reduction based on the attorney’s block billing and a 20 percent reduction based on the attorney’s use of quarter-hour minimum billing segments. On the other hand, the court held that it is appropriate for a fee award to include consideration of the attorney’s delay in receipt of fees. More generally, the court held that the appropriate hourly rate must be one that is charged, on an hourly basis, by equivalently skilled practitioners and that the time spent on various litigation-related activities must not be excessive. "

Not legal malpractice, but about legal fees.

Associate intercepts calls, moves clients around, takes away business, indicted, convicted, jailed.

Now, the litigation is about lost clients.  Here is the Appellate Decision.

the NYLJ today reports:

"The New York State Commission on Judicial Conduct voted Tuesday to curb the responsibilities of its chairman, celebrity divorce lawyer Raoul Felder.

The vote came in the wake of Friday's "no confidence" vote in Felder because of what the commission described as the "racial, ethnic and religious invective" in "Schmucks!" a book he co-wrote with comic Jackie Mason.

Felder did not attend the meeting. The resolution, which was adopted without dissent, withdrew from Felder the authority to serve as the body's spokesman.

In another move aimed at Felder, the commission said it is changing its prior practice of allowing any of its 11 members to sign non-public letters of caution issued to judges.

"Until further notice," the resolution states, all of the commissioners, "other than the chair," shall have the authority to sign the letters.

In an interview Wednesday, Felder disputed the commission's factual premise, saying the past practice had been for only the commissioner to sign the letters. The body was acting, he said, out of a "hysterical" concern that he would refuse to sign the letters.

Felder agreed that the commission's administrator, Robert Tembeckjian, should alone handle dealings with the media, and noted that he had deferred to Tembeckjian since becoming chairman last June.

Tembeckjian said Wednesday that the commission continues to examine whether it has the authority to remove Felder as chairman.

Cassandra Crottyreports in the Illinois Legal Malpractice Blog that:

"Insurer Able To Proceed With Legal Malpratice Lawsuit
An Illinois appellate court recently reversed a circuit court entry of summary judgment in favor of a lawyer and his Park Ridge law firm, holding that an insurance company can proceed with its legal malpractice lawsuit against the law firm that represented the insurer in connection with a coverage dispute. The appellate court found that the "defendants failed to meet their burden of production on their motion for summary judgment because they did not present evidence that, left unrebutted, would entitle them to judgment as a matter of law or demonstrate that the [insurer] would be unable to prove any element of its cause of action."

The case-within-a case stemmed from a car accident that occurred in 1991. The insurer, Universal Underwriters Insurance Co., had issued an insurance policy to Carriage Chevrolet Inc., a car dealership in St. Louis. Michele Heflin, a Carriage Chevrolet salesperson, was driving a car owned by the dealership when she pulled over to help a driver with a disabled vehicle on the side of the road. While Heflin was rendering assistance, another car struck and injured her. Heflin filed suit against the driver and received $25,000 - the limit of the driver's policy. Heflin then turned to the Universal umbrella policy issued to her employer, Carriage Chevrolet, arguing that it provided under-insured motorist coverage. When Universal denied her claim, Heflin then filed a declaratory judgment suit asking the court to determine and adjudicate the rights and liabilities of the parties with respect to the umbrella policy. Universal then hired the defendants in this action, Jay Judge and his law firm, Judge & James, to defend it in the dec action. 1n 2001, after litigating the action (in court and in arbitration), the trial court entered an order requiring Universal to pay $2,975,000 plus interest, and two weeks later, Universal, through new counsel, settled Heflin's claim for $3 million.

Universal then filed this legal malpractice suit against it's former lawyers. In its amended complaint, Universal contended that the lawyers owed it a duty of care, which included the obligation to take timely appeals and to timely seek other remedies in the event of adverse and erroneous judgments. Additionally, Universal contended that the lawyers breached their duties by failing to raise the $1 million umbrella policy limit as a defense or limitation on damages in the arbitration proceeding"

Here is a newspaper article recounting the story of a rape-security trial at which the attorney failed to show.  Legal malpracitce and a roller coaster of dismissal, reversal, affirmance followed.

"The state Supreme Court declined Wednesday to hear a case in which a state appeals court ruled an Escondido rape victim can sue two civil attorneys for alleged legal malpractice.

The court's decision leaves in place the January appeals court ruling that said the lawsuit against the attorneys, Mark Kelegian and Thomas Morgan, can proceed.

The attorneys represented the woman when she sued the landlord of the apartment complex where she was raped for allegedly failing to provide sufficient security at the property. Kelegian did not show up for the trial of that lawsuit, and the woman learned the case already had been dismissed, the appeals court ruling stated."

Plaintiff loses on appeal in this legal malpractice case.  Injured in a casino after slipping and falling in vomit, the attorney sent a claim letter but  did nothing further, the statute of limitations then running out.  AD:  no proof of notice to the casino, and legal malpractice case must be dismissed.

"The issue in this legal malpractice action is whether plaintiff established that "but for" the negligence of defendants in failing to timely commence a personal injury action on her behalf, she would have prevailed in that litigation. On July 4, 2002, plaintiff was walking through the lobby of the Trump Taj Mahal Casino Resort in Atlantic City when she slipped on a substance she identified as vomit. Plaintiff did not see any substance on the floor prior to her fall. She alleges that after she fell, a woman dressed in a blazer and holding a walkie-talkie, whom she believed to be a security guard, came over and told her to get up. When she tried to get up unassisted, she allegedly fell again in the vomit

"After depositions, defendants filed a "renewed" motion for summary judgment, this time relying on plaintiff's deposition testimony, where she again admitted that she had no information regarding how long the dangerous condition existed. Defendant Kuczinski also noted that during each of his discussions with plaintiff about the case, she never mentioned any "second" fall. Plaintiff responded that she should not be penalized for her inability to prove notice in the underlying action, since that inability was solely the product of defendants' negligence in failing to investigate the case and timely commence an action. According to plaintiff, had a formal action been timely commenced, she would have obtained the names of crucial witnesses, such as the security guard, as well as any surveillance videotapes kept by the casino, in routine pre-trial discovery proceedings. In addition, plaintiff argued that actual or constructive notice could be inferred in the underlying action, given the vomit's proximity to the lobby desk and bell boy station.

On appeal this legal malpractice arising from a medical malpractice case reated a partial reversal after suffering dismissal in Supreme Court.  The attorney who was defended by Kaufman Borgeest Ryan attorney Michael Furman won his appeal.  Attorney Mondora, representing himself, lost, and had his dismissal reversed.  A pyrrhic victory against a pro-se uninsured attorney??

They say that this med mal case closed down an organ transplant hospital program in LA.  Doctors were rejecting viable organs and keeping transplant paitients waiting.  Plaintiff successfully sued, then learned more.

"A state appeals court has resurrected the malpractice lawsuit that helped shut down UCI Medical Center's troubled liver transplant program.

A lower-court judge threw out the case two years ago on grounds that plaintiff Elodie Irvine had agreed to a $50,000 settlement from the hospital.

Irvine, who had deadly kidney and liver disorders, spent four years on UCI's organ transplant waiting list before transferring to another hospital and getting the procedures done within two months.

She sued UCI in 2004 for negligence and fraud. A year later, she signed an agreement to settle the case for $50,000. But before the check arrived, she found out the Orange hospital had rejected 38 livers and 57 kidneys available to her through a national organ clearinghouse. "

She refused to cash the $50,000 check and asked a judge to overturn the settlement. The judge denied her request.

Irvine, of Irvine, appealed that ruling and scored a victory Monday when a four-judge panel for the 4th District Court of Appeal said Orange County Superior Court Judge Randell Wilkinson had erred when he rejected her motion to overturn the settlement agreement.

In reinstating Irvine's case, the appeals court didn't evaluate the merits of her cla

This short news article tells us that this law firm has a lot of legal malpractice litigation going on around it.

"An Augusta attorney and his former law firm claim they are justified in withholding certain information from a former client who is suing them.

Monday was the deadline for William Fleming, John Fleming and The Fleming firm to respond to a motion filed by Wendell A. Jenifer's new attorneys.

Mr. Jenifer alleges the Fleming attorneys were negligent and cost him a chance of receiving compensation for a 1999 injury.

The federal lawsuit against the Fleming attorneys was filed last year. Last month Mr. Jenifer filed motions asking the court to force the Fleming attorneys to turn over certain information.

Mr. Jenifer's attorney complained to the court that the Fleming attorneys were holding back information about 22 other malpractice claims that were filed with the Fleming firm's insurance company in 2002.

We're proud to present our 1000th story here on the New York Atorney Malpractice Blog. 

Thanks for reading and staying with us for Legal Malpractice News and cases.

Attorney attendence at trials and conferences is a big source of legal malpractice troubles.  Here is a case from Brooklyn:

Diamond v. Diamante, 27030/03
Decided: March 22, 2007

Justice Diana A. Johnson

KINGS COUNTY
Supreme Court

"On the trial adjourn date of November 15, 2006, plaintiff Claudia Diamond and her attorney James D. Reddy failed to appear. Plaintiff Sheldon Diamond, the husband of Claudia Diamond, appeared and related that Mr. Reddy had told him the day before that he would be unable to be in court, that he had two other cases on Long Island, and to ask for an adjournment. Mr. Diamond was not given an affirmation of engagement to present to the Court by Mr. Reddy.

Mr. Grossman moved to dismiss the action with prejudice. In response Mr. Diamond stated that his wife should not be punished for Mr. Reddy's actions, that hiring him had been a terrible mistake, and that his wife was sick and she should have an opportunity to have justice served. The court clerk indicated that Mr. Reddy had called the day before seeking an adjournment claiming his client Claudia Diamond was sick.

On consideration of the attendant circumstances the Court finds Mr. Reddy failure to appear on November 15, 2006 was without good cause. The Court is cognizant of the fact that Mr. Reddy is a solo practitioner and is loath to impose sanctions. In consequence the Court sought to avoid having the hearing and encouraged Mr. Reddy to settle the costs matter with Mr. Grossman and Ms. Punzone. The Court indicated if a settlement was made, the Court would consider the matter closed regarding his nonappearance on November 15, 2006 and not proceed with the sanctions hearing. However, Mr. Reddy insisted in the correctness of his actions and that he had been entitled to an adjournment under Part 125. Mr. Reddy has totally misconstrued the function of Part 125 which is to delineate and provide the criteria upon which an attorney may obtain an adjournment based on being otherwise engaged. This is in recognition of the fact that at times the responsibilities of competing cases may cause an attorney through no fault of his/her own to have conflicting engagements. Its purpose is to set up priorities when such conflicts arise, not to create a way for an attorney to extricate himself from a scheduled trial date he is aware of, by setting up a conflict and then using the conflicting engagement as the excuse for not appearing when the other side will not consent to an adjournment. No less than his own affirmation of engagement establishes that his failure to appear was self-created and avoidable. As stated at paragraph 13, "[b]ased on the reported illness of the plaintiff Claudia Diamond by her husband and the inability to continue her testimony on November 15, 2006, I seized the opportunity to seek a temporary restraining order . . . ." (emphasis added). Mr. Reddy's explanation for not appearing is without merit and is inexcusable. Accordingly the Court finds based on the testimony elicited at the hearing that the reasonable amount of costs incurred by Ms. Punzone due to her appearance on November 15, 2006 to be $129.00; and the reasonable amount of costs incurred by Mr. Grossman to be $500.00. The Court further imposes upon Mr. Reddy sanctions pursuant to Subpart 130-2 in the sum of one thousand dollars ( $1000.00) to be deposited with the Lawyers' Fund for Client Protection. Judgment is granted against Mr. Reddy accordingly.

This NJ case was was "dismissed on the ground that plaintiff had voluntarily settled the underlying case without exhausting its appeal and separate active lawsuits, and thus was precluded as a matter of law from attempting to recoup the difference in the malpractice action against defendant. We reverse and remand. " wrote the SUPERIOR COURT OF NEW JERSEY,APPELLATE DIVISION ,
DOCKET NO. A-2991-05T52991-05T5 .

"We are persuaded by many of plaintiff's arguments and are satisfied the complaint should not have been dismissed on summary judgment. This case is factually and legally distinguishable from Puder and does not have the "fairness and the public policy [considerations] favoring settlements" or the equities that pervaded that case. Plaintiff's principal never represented to anyone, let alone a court, that its settlement with the nursing homes was a "fair" and satisfactory resolution of its underlying claims. Nor by now suing Squitieri for malpractice is plaintiff seeking to profit from litigation positions that are "clearly inconsistent and uttered to obtain judicial advantage." Puder, supra, 183 N.J. at 444 (quoting Newell v. Hudson, 376 N.J. Super. 29, 46 (App. Div. 2005)). Moreover, plaintiff did not settle the underlying suit with the nursing homes prior to the trial court ruling on its motion to amend the complaint to assert the omitted Medicare-denied claims. That plaintiff chose to take the further steps and appeal the trial court's denial of its motion to amend and to file the subsequent lawsuits to preserve the statute of limitations on its underlying claims, and thereafter decided, for a variety of reasons, to settle with the nursing homes prior to obtaining judicial determinations did not, under the circumstances of this case, preclude plaintiff's malpractice claim as a matter of law.

The trial court should have evaluated whether plaintiff took reasonable steps, from plaintiff's point of view, to remedy Squitieri's alleged negligence before pursuing its malpractice action, which presented factual issues that could not be decided on this record on summary judgment. Instead, the court erroneously assumed as a matter of law under Puder that by filing the appeal and subsequent lawsuits, plaintiff had other forums in which to pursue its underlying claims, which it voluntarily chose not to pursue, and thus it was estopped from now proceeding against Squitieri. Moreover, the record does not support the court's finding as to the viability of the two Law Division actions. On the contrary, we are satisfied there was credible evidence the complaints would not withstand Dellridge nursing home's May 2003, dismissal motion. There was also an insufficient basis for the court's finding on summary judgment that plaintiff had a good chance of success on its appeal. We do not believe the case law is as clear-cut as stated by the court. Expert testimony will most likely be required to assist the jury to determine the merits of plaintiff's appeal of the underlying case and the potential for reversal of the motion judge's denial of leave to amend the complaint, as well as the merits of the nursing home's cross-appeal of the jury verdict. Furthermore, in assessing the reasonableness of plaintiff's actions, the jury will also need to analyze all of the considerations that entered into plaintiff's decision to settle the underlying case and dismiss the appeal, including the amount of the settlement.

We reverse the summary judgment dismissal of plaintiff's malpractice complaint and remand for further proceedings. Plaintiff will proceed to prove Squitieri's malpractice by way of the suit-within-a-suit or other appropriate format. Garcia v. Kozlov, Seaton, Romanini, & Brooks, P.C., 179 N.J. 343, 358 (2004). Defendant has the right to assert, among its other defenses, that it was unreasonable for plaintiff to settle the underlying case and dismiss the appeal, including that the amount of the settlement was unreasonable. "

We had not heard of this particular branch of legal malpractice before, but upon examination, it is a classic.  Equity-stripping foreclosure  fraud legal malpractice.  Here's the basic outline:  homeowner gets in financial trouble, faces foreclosure.  Group, including lawyers comes in, induces the homeowner to transfer ownership to avoid foreclosure.  Group gets a new mortgage, re-sells through their superior ability/knowledge and disposesses the homeowner.  

No surprise, there is a web site devoted to this particular problem. Read on.  Q:  How did they get these big-law firms to represent them????

"A foreclosure rescue lawsuit brought by a couple in a Brooklyn, New York Federal Court was settled privately by the parties involved earlier this year. The homeowners in this case brought suit against foreclosure rescue operator Principle Investors Realty, and individuals Frankie L. Freeman, Edith A. Lorick, attorneys Fred D. Way, III (remember him from yesterday's posts) and Appolo Pitton, and Kevin Waite, who ultimately ended up with the title to the home. When the homeowners approached the operators for help in "saving" their home, they (the foreclosure rescue operator) allegedly proceeded to engage in an equity stripping, foreclosure rescue deal that ultimately forced the homeowners out of their home. According to the allegations contained in the lawsuit:

"But instead of helping the Hineses save their home, Freeman induced them to transfer their deed to his associate, defendant Edith A. Lorick ("Lorick"), who took out a new mortgage on the property that exceeded the Hines's previous mortgage by more than $100,000; distributed the proceeds of the new mortgage to himself and his co-conspirators; and demanded monthly rental payments from the Hineses that he knew they could not afford. Unable to make the payments, the Hineses were forced to move out of their home."
According to the lawsuit, the property was ultimately sold for $100,000 more than the amount of the subsequent mortgage taken out by Lorick, and nearly $200,000 more than the payoff amount on the homeowners' original mortgage. The homeowners allegedly only received $10,000 in the transaction.

This lawsuit brought claims (not unlike many of the claims brought in those New York cases I reported on in yesterday's posts) against those involved for:

Equitable Mortgage (NY Real Property Law Sec. 320),
Violations of the Federal Truth In Lending Act,
Violations of the Federal Real Estate Settlement Procedures Act,
Common law fraud,
Conspiracy to commit fraud,
Violations of New York State General Business Law Sections 349 & 350 ("The Deceptive Practices Act"),
Conversion,
Unjust Enrichment and Constructive Trust,
Legal Malpractice
Representing the homeowners in this case were attorneys from the firms Chadbourne & Parke, LLP and Patterson Belknap Webb & Tyler LLP. 

"

Federal judge on Friday declined to dismiss a challenge to the constitutionality of New York state's new rules on attorney advertising.

Northern District Judge Frederick J. Scullin Jr., sitting in Syracuse, set June 18 for the beginning of a trial on the constitutionality of the state's new guidelines on attorney advertising.

The new rules, adopted by the presiding justices of the four Appellate Divisions, went into effect Feb. 1. They are being challenged by the personal injury firm Alexander & Catalano of Syracuse and Rochester, that firm's co-founder James L. Alexander and Public Citizen Inc., a Washington, D.C.-based advocacy group founded by Ralph Nader in 1971.

After a hearing, Judge Scullin denied the state's motion to dismiss in Alexander v. Cahill, 5:07-CV-00117. Ruling from the bench, he also reserved judgment on the plaintiff's motion for a preliminary injunction against enforcement of the rules and told the parties to prepare for an expedited trial.

"It is a great victory for us because it will allow us to get a final determination of the constitutionality of these rules pretty quickly," Gregory A. Beck of the Public Citizen Litigation Group who argued Friday for Public Citizen and the Alexander & Catalano firm said in an interview. "Every day that goes by is another day that those First Amendment rights are being violated."

This headline caught my attention:

"The New York State Commission on Judicial Conduct has voted "no confidence" in its chairman, matrimonial lawyer Raoul Felder, because of the inflammatory nature of a book, entitled "Schmucks!" he wrote with comedian Jackie Mason.

The agency's 10 commissioners - all but Mr. Felder - were unanimous in expressing their loss of confidence. Mr. Felder did not participate in the deliberations.

In a statement issued Friday, the commission said "we are exploring our options in terms of removing [Mr. Felder] as chair"

One of the lessons to learn in litigation is: "stick to what you know."  Woe to the first time practitioner who takes on a new area of law.  Here is an example of an attorney who did not realize that almost all insurance policies have a short statute of limitations.  The policy called for one year, the CPLR granted a minimum of two years, but unfortunately, the attorney thought it was a 6 year contract statute. 

"In September 1996, plaintiff retained defendant to represent her in connection with a hazard insurance claim for damages caused to her residence and place of business in a December 1995 fire. The parties were unable to reach a settlement and defendant commenced an action on plaintiff's behalf against the insurer, among others, in February 2000. Supreme Court (Rumsey, J.) granted the insurer's motion to dismiss on the ground that the action had not been commenced within the insurance policy's two-year statute of limitations, and this Court affirmed (Bergin v Quincy Mut. Fire Ins. Co., 289 AD2d 661 [2001]). In this action, plaintiff claims that defendant's failure to timely commence the underlying action against the insurer constituted legal malpractice. She appeals from the denial of her motion for partial summary judgment on the issue of defendant's negligence, and we now reverse.

Defendant does not dispute that the insurance policy contained a [*2]provision limiting the time to commence suit to one year and that the provision was properly construed to conform to the two-year statutory minimum period (see Insurance Law § 3103 [a]; § 3404 [e]). Rather, he asserts that he believed that the six-year limitations period for contractual claims applied (see CPLR 213), was not aware of the potential for a contractual statute of limitations being incorporated within the policy itself and learned of the two-year contractual limitations period only upon service of the insurer's answer. In our view, however, inasmuch as the insurance policy indisputably set forth a shortened statute of limitations and defendant admittedly failed to commence an action within the applicable time frame provided by statute, his conduct "fell below the ordinary and reasonable skill and knowledge commonly possessed in the legal profession," and constituted negligence as a matter of law (A.H. Harris & Sons v Burke, Cavalier, Lindy & Engel, 202 AD2d 929, 930 [1994]; see Deitz v Kelleher & Flink, supra at 945; see also Logalbo v Plishkin, Rubano & Baum, 163 AD2d 511, 514 [1990], lv dismissed 77 NY2d 940 [1991]; Shaughnessy v Baron, 151 AD2d 561, 562 [1989]; see generally Jones Lang Wootton USA v LeBoeuf, Lamb, Greene & MacRae, 243 AD2d 168, 175 [1998], lv dismissed 92 NY2d 962 [1998]). Accordingly, we reject defendant's argument that there is a question of fact under these circumstances and conclude that plaintiff is entitled to summary judgment on the issue of whether defendant was negligent in failing to properly commence her action against the insurer (see Williams v Kublick, 302 AD2d 961, 961-962 [2003]; Stanksi v Ezersky, 210 AD2d 186, 186 [1994]). "

"A soon-to-be-released study by the American Bar Association shows that the number of legal malpractice suits lodged against "white shoe" firms has risen dramatically since 1996. While the case volume is still small, this study represents a costly, long-term problem for large corporate law firms." As the Cuban & Reyes blog tells us:

"In the recent ABA study released to Legal Times last week which compared two four-year periods, 1996 to 1999 and 2000 to 2003, the ABA found that legal malpractice cases of $2 million or more jumped 60 percent. The growing severity of claims stems in part from the major corporate scandals of the past five years, which have opened law firms up to new liabilities, insurers and law firm managers say the fallout goes beyond some of the biggest headlines"

Here's a report from the NY Lawyer:

"In Country Star's Divorce, Her Ex Sues Her lawyer, Her Maid Sues Everyone and the Beat Goes On

New York Lawyer
April 13, 2007

By The Associated Press

NASHVILLE, Tenn. -- The husband of country singer Sara Evans is suing one of his wife's divorce attorneys and his firm, alleging the attorney slandered and libeled him with untrue allegations of adultery.

Craig Schelske filed the $20 million lawsuit against Nashville lawyer John Hollins Sr. on Wednesday in Davidson County Circuit Court.

He contends that Hollins made false statements to the media.

"He (Schelske) was quoted in the press as saying he hadn't done anything wrong and he wanted everybody to pray for Sara," the lawsuit says Hollins told People magazine. "Let me tell you what, everything we allege, we've got photographs to back up the allegations of the complaint."

The lawsuit states that Hollins knew the statement was false and "knew that no photographs existed which depicted the plaintiff engaged in any type of illicit or adulterous activity," Schelske said in the court filing.

Schelske is asking that Hollins pay $10 million in compensatory and punitive damages. He also wants the firm of Hollins, Wagster, Yarbrough, Weatherly & Raybin to pay $10 million, as well.

Both Hollins and Schelske's attorney, Brad Lampley, declined comment Thursday, citing a gag order for both parties in the case.

The lawsuit is the latest development in the bitter divorce between Evans and Schelske.

The singer's former nanny, Alison Clinton Lee, filed a $3 million lawsuit on Tuesday against Evans, Hollins, John Hollins Jr. and their law firm claiming she was a victim of "slanderous and libelous" statements in Evans' October 2006 divorce filing.

In the filing, Evans claimed that the nanny had an affair with her husband, which both the nanny and Schelske deny. Schelske later responded that Evans filed for divorce the same day he discovered she was having an extramarital affair.

Schelske, who ran unsuccessfully for the Republican nomination for the U.S. House in Oregon's 5th District in 2002, has denied the allegations. "

Here is an interesting re-cap of the issues:

"There seems to be more confusion than there should be over causes of action against lawyers for breach of fiduciary duty. A recent complaint (Download irell0409.pdf) by Charter Communications against Irell & Manella exemplifies the tendency of malpractice plaintiffs to plead breach of fiduciary duty claims as well, based on much the same conduct and claiming the same damages.

A recent opinion requiring the Wilson, Elser firm to disgorge over over $3 million in fees (see story here) pointed me to a very fine article on the subject by Chuck Wolfram. I largely agree with what I see as his conclusion--that courts should not recognize as independent causes of action breach of fiduciary duty claims that do no more than re-hash malpractice claims, seeking the same relief based on the same facts--though I think of it in a slightly different way. (NY and Illinois courts follow this approach; California does not, so far as I know). "

These loses are from stolen money, not legal malpracitce.  The numbers are huge:  in the millions.

The NYLJ reports: "Dishonest attorneys prompted the awarding of $7.1 million in 2006 from the Lawyers' Fund for Client Protection, which warned yesterday that the fund is likely to start seeing claims from the largest case of lawyer theft in its 25-year history.

Last year, the fund paid out $1 million less than the $8.1 million awarded in 2005. The average awarded annually over the last five years has been just over $6.3 million. (The report is available at www.nylawfund.org.)

See the 2006 Annual Report and highlights from the report.

Officials say the fund's finances are "very strong," but claims for reimbursement from clients defrauded by Andrew F. Capoccia and two attorneys working for him in his debt-reduction practice could total $5 million to $6 million alone, although the claims might be spread over more than one year, said Timothy J. O'Sullivan, executive director and counsel to the fund. Several hundred, and possibly thousands of clients, may seek help once federal authorities distribute restitution payments, he said in an interview yesterday.

"These catastrophic losses will challenge the New York Fund's ability to be able to continue to serve as a model for effective law client protection in our nation," the fund's 2006 report warned.

The precise amount that former clients of the Andrew F. Capoccia Law Centers of Albany and a successor firm, the Law Centers of Consumer Protection that moved to Bennington, Vt., will seek from the fund depends on how much in assets and restitution federal authorities can secure from Mr. Capoccia and two attorneys who worked for him, Howard Sinnott and Thomas Daly. Mr. O'Sullivan said federal authorities have seized about $4 million in assets so far in the case.

Mr. Capoccia is serving 15-2/3 years in prison for conspiracy, mail fraud, wire fraud and other charges for his role with the two firms, which federal authorities said diverted millions in client funds to accounts controlled by Mr. Capoccia's wife. Carol Capoccia faces up to 10 years in prison and a fine of up to $250,000 when she is sentenced April 27 in connection with guilty pleas in January to obstructing a federal grand jury investigation. "

This Madison Record article contains a months work of issues: conflict of interest, change of venue, prejudice, blackmail, child ponography, indictments, plaintiff's attorney joining the firm he has sued;  it just goes on and on.

"When Gary Peel joined the Lakin Law Firm in September 2003, he had spent the previous 17 months accusing the firm of malpractice.

Peel sued the firm in Madison County Circuit Court in April 2002, on behalf of William Coates.

Peel alleged that the firm failed to sue a Greene County farmer who may have caused the death of his client's son, Michael Coates.

Peel dropped Coates as a client when he joined the Lakin firm. Chief Judge Edward Ferguson assigned the case to Circuit Judge Daniel Stack, who set it Nov. 1, 2005.

By then attitudes in Madison County had changed so fast that the Lakin firm tried to escape the community's judgment.

Six days before trial the firm's attorney, Jeffrey Mitchell of Geneva, moved for change of venue.

"Defendants cannot receive a fair trial in Madison County…," Mitchell wrote.

He argued that negative press about the firm's principal, Tom Lakin, tainted the jury pool.

He wrote that on July 20, 2005, the St. Louis Post-Dispatch reported that West Virginia suspended Tom Lakin for a year.

He wrote that on July 22, 2005, the Belleville News-Democrat reported Tom Lakin's discipline in West Virginia.

Stack denied the venue change and started the trial.

He stopped it when Bosslet and Mitchell told him they settled.

By then the author of the complaint had turned into another embarrassment for the Lakin firm.

Peel had filed a bankruptcy petition seeking relief from obligations to former wife Deborah J. Peel under a divorce agreement.

He had tried to cancel the agreement in St. Clair County divorce court, claiming she tricked him into signing a contract he did not understand.

In January 2006 he allegedly tried to blackmail her.

Grand jurors at U.S. District Court in East St. Louis indicted Peel in March 2006 on charges of bankruptcy fraud, possession of child pornography and obstruction of justice.

He left the Lakin firm.

This March, a federal jury in East St. Louis convicted him on all counts.

Back in Edwardsville, Peel's old lawsuit still hasn't gone away.

Bosslet and Mitchell never filed the settlement stipulation they told Stack they would file. The case remains open on Stack's docket."

In New York there is case law which holds the attorney liabile for errors by a process server. Here is a similar case and analysis from Arizona

"Like most states, Arizona recognizes an exception to this rule, generally referred to as the "nondelegable duty exception." Id. "The policy reasons justifying such a departure are that the employer is the one who primarily benefits from the contractor's work, the employer is free to select the contractor and may insist on one that is financially responsible and competent, and the employer has the ability to internalize the cost of insurance necessary to distribute the risk as a cost of doing business." Miller v. Westcor Ltd. Partnership, 171 Ariz. 387, 391, 831 P.2d 386, 390 (App.1991).

As the Arizona Supreme Court held in Ft. Lowell, the nondelegable duty exception arises in situations involving a "special relationship between persons," such as "persons who engage in relationships that are 'protective by nature' (e.g., the common carrier, innkeeper, employer) [who] are often held to possess an affirmative duty to guard the safety of their respective charges." Ft. Lowell, 101, 800 P.2d at 967. The Court explained:

The nondelegable duty exception is somewhat of a misnomer because it refers to duties for which the employer must retain responsibility, despite proper delegation to another. Such situations exist where the employer is under a higher duty to some class of persons. This duty may be imposed by statute, by contract, by franchise or charter, or by the common law. If the employer delegates performance of a special duty to an independent contractor and the latter is negligent, the employer will remain liable for any resulting injury to the protected class of persons, as if the negligence had been his own. The exception is premised on the principle that certain duties of an employer are of such importance that he may not escape liability merely by delegating performance to another.
The type of situation -- i.e., negligence of a process server -- was addressed in Kleeman v. Rheingold, 614 N.E.2d 712 (1993), where a client brought a legal malpractice action against a law firm based upon negligence of process server in failing to serve medical malpractice defendant within statute of limitations. The sole issue addressed by the Court was "whether an attorney may be held vicariously liable to his or her client for the negligence of a process server whom the attorney has hired on behalf of that client." Id. at 714. "

An Apology rather than a law suit.  This article reports that it works in medical malpractice.  Would it work in legal malpractice?

"Since encouraging its doctors to apologize for errors, the University of Michigan Health System's annual attorney fees have dropped by two-thirds, and malpractice suits and notices of intents to sue have fallen by half, says a former ...
"

Yesterday we reported on the Thomas Hyland letter in support of his firm's position in the Wilson Elser Legal Malpractice case.  Today, a bar association rejoinder.  This second letter is not directed to the arguments that WEMED made, but to the entire concept of arguing the merits of a law suit in the letters to the Editor venue.:

"Letter to the Editor

Letter Is Disservice To Bench and Bar

New York Law Journal
April 11, 2007

I write with reference to the letter published on April 9, 2007, from Thomas W. Highland of Wilson Elser Moskowitz Edelman & Dicker. I am disturbed both by the fact of Mr. Highland's letter and by its contents. The letter itself takes exception with no statement contained in an April 5 story to which the letter purports to respond. Indeed, that story reports the Wilson Elser firm's disappointment with the court's decision. But, Mr. Highland's letter goes beyond that perfectly natural response. He offers a one sided, condensed version of the arguments he says he looks "forward to presenting . . . to a higher court," together with the citation of cases and rehashing of evidence. His letter seems more appropriate for an appellate brief rather than a letter to the editor.

I believe that such letters, especially from lawyers associated with a case pending in the courts, are inappropriate for a variety of reasons, not the least of which is the potential threat they pose to judicial independence. As a lawyer, Mr. Highland is presumably aware that his criticism of the judge cannot be answered by the judge herself because of ethical constraints upon a judge's comments about pending cases. In that sense, the letter is patently unfair to the judge because it was composed with knowledge that the judge would not and could not respond in kind. I hope that Wilson Elser's adversaries refrain from submitting some counter-letter for publication because such partisan sparring in the press detracts from the independence of the bench, the role of appellate courts, and the dignity of the organized bar.

I hope that no members of the judiciary will be deterred from "calling them like they see them" by the potential threat of litigants or their lawyers presenting their one sided views to the media about pending or impending litigation. I urge all members of the bar to refrain from writing or circulating such letters during the course of litigation in which they are so clearly partisans. Such letters as that April 9 letter are a far cry from the scholarly and thoughtful commentary by objective lawyers, for which the Law Journal is esteemed to publish. That sort of commentary is a service to both the bench and the bar. I submit that the April 9 letter is disservice to both.

Edwin David Robertson
The author is president of the New York County Lawyers' Association. "

Geoffrey Tracktenberg reports this comma error which cost one side $1 Million in a legal malpractice case, which stemmed from a contract sentence.  The story itself came from the NY TImes.

"The dispute is over this sentence: "This agreement shall be effective from the date it is made and shall continue in force for a period of five (5) years from the date it is made, and thereafter for successive five (5) year terms, unless and until terminated by one year prior notice in writing by either party."
The regulator concluded that the second comma meant that the part of the sentence describing the one-year notice for cancellation applied to both the five-year term as well as its renewal. Therefore, the regulator found, the phone company could escape the contract after as little as one year."

The Wall Street Journal reports [subscription] that biglaw is a business, and is increasingly the target of legal malpractice suits.  The report is supplemented with a Hinshaw attorney quote.

"Big law firms are mostly in the business of keeping others out of trouble, not themselves. But some practitioners who defend law firms are seeing an uptrend in legal-malpractice claims. "The profession has become more like a business," says Philip Touitou of Hinshaw & Culbertson LLP in New York. "Now that firms have big revenues they're now seen by the plaintiffs' bar as viable targets."

Last week alone offered up two high-profile examples, each stemming from soured business deals consummated back around 2000.

On April 6, a Minnesota federal judge ordered that Dorsey & Whitney LLP disgorge about $887,000 in ... "

Moving from Bankruptcy court to Federal District Court, the law firm again loses:

"Firm's Bad Faith Leaves Bad Taste of $877,000 Malpractice Tab

New York Lawyer
April 10, 2007
Reprints & Permissions

By Leigh Jones
The National Law Journal

A Minnesota federal court has found Dorsey & Whitney liable for more than $877,000 for legal malpractice, breach of fiduciary duty and acting in bad faith for its role in a botched Indian casino deal.

Affirming a U.S. Bankruptcy Court decision issued last year, U.S. District Judge Donovan W. Frank ordered Dorsey & Whitney to turn over $887,440 in legal fees it received from former clients it represented in orchestrating a finance deal gone awry for the Akwesasne Mohawk casino in upstate New York.

In a 94-page decision, the judge determined that the 600-attorney firm breached its fiduciary duty of loyalty by representing two adverse clients at the same time and failed to inform its clients that it might have committed malpractice.

A spokesman for Dorsey & Whitney said the firm disagreed with Judge Frank's decision, which it will appeal to the 8th Circuit Court of Appeals.

Edward Gale, a partner with Leonard, O'Brien, Spencer, Gale & Sayre, in Minneapolis, represented the plaintiffs. "

Zenith Ins. Co. v. Cozen O’Connor, Case No. B184684 (Cal. Ct. App., March 21, 2007).

"The issue presented in this case relates to the nature and extent of the duty, if any, owed to the reinsurer by counsel retained by the ceding insurer to protect the interests of the insured under the underlying policy.

In this action for professional negligence, Zenith Insurance Company (“Zenith”) entered into a contract of reinsurance with Royal Insurance Company (“Royal”). Under the contract, Zenith agreed to reinsure 100% of Royal’s exposure under certain liability policies. After claims were asserted against Royal’s insured, Royal retained the law firm of Cozen O’Connor to provide legal services with respect to the defense of such claims. Ultimately, Zenith filed this action for professional negligence against Cozen alleging that an attorney-client relationship existed based on either: (1) an implied in fact contract; or (2) the theory that Zenith was an intended beneficiary of Cozen’s legal services.

The California Court of Appeals disagreed with Zenith for two reasons. First, under the “intended beneficiary” theory, both Cozen and Royal must have intended Zenith to be the beneficiary of legal services Cozen was to render. The Court held that the fact that Cozen’s representation could incidentally benefit Zenith did “not sufficiently satisfy this predicate.” Moreover, the fact that Zenith agreed to reimburse Royal for all legal fees did not change the conclusions. Second, there was no express agreement between Zenith and Cozen, and Zenith did not allege the predicate facts necessary to establish an implied contract between it and Cozen. Zenith Ins. Co. v. Cozen O’Connor, Case No. B184684 (Cal. Ct. App., March 21, 2007). "

This article from columnists Norman Arnoff and Sue Jacobs [subscription] warns us to protect legal malpractice coverage by carefully answering the application questions.

"Every year someone in each law firm has the task of completing the application for the Lawyers' Professional Liability Policy commonly called the Malpractice Policy. The policy is "claims-made" so that claims first made during the policy period will be covered during the policy in issue. If the policy is "claims-made and reported" the claim must also be reported during the policy period for coverage.

If the applicant does not disclose or misrepresents a fact that ripens into a claim or lawsuit during the policy term, the carrier may claim the law firm made a false representation of a material fact to induce the carrier to issue the precise policy. The carrier may also attempt to rescind the policy if the claim is significant.

The lawyer may believe she did not purposely answer the question falsely, but, rather, was unaware of all the underlying information. If there is an innocent reason for the nondisclosure the insurer will not be able to rescind. Rather, the carrier will have to establish the misrepresentation to be material and fraudulent, and that it would not have issued the policy for the premium charged if it had the true facts.
"

The Wall Street Journal reports:

"Charter Communications filed a lawsuit Friday against Irell & Manella, accusing the prominent Los Angeles firm of “critical errors” in completing a 1999 cable TV acquisition. The lawsuit alleges, among other claims, legal malpractice and requests damages of $150 million. Here’s the 31-page complaint and a story from Saturday’s L.A. Times.

Charter’s suit, filed in federal court in Santa Ana, Calif., also claims that Irell concealed its mistakes for as many as nine months in 2002 after learning about them. Irell has long represented Charter, a St. Louis-based cable company controlled by Microsoft poohbah Paul Allen. During the entirety of their relationship, Charter has paid Irell $55 million in fees, according to the complaint.

Stephen Higgins of Thompson Coburn in St. Louis filed the lawsuit on behalf of Charter. Also signing on to the complaint: David Freishtat of Freishtat, Mullen & Dubnow in Hunt Valley, Md., and the Enterprise Counsel Group in Irvine, Calif.

“If Charter suffered any loss at all, our firm was not the cause,” Irell partner David Gindler told the LAT. “We are confident that we will prevail as the whole story emerges in court.”

Aquino v Kuczinski, Vila & Assoc., P.C.
2007 NY Slip Op 02801
Decided on April 3, 2007
Appellate Division, First Department

Here is a legal malpractice case arising from defendant's failure to bring a slip and fall case within the statute of limitations.  Legal Mal case lost becasue attorneys did not produce evidence that plaintiff would have won.  Evidence would have  to show that casino had constructive notice of defective condition causing slip and fall. 

"The issue in this legal malpractice action is whether plaintiff established that "but for" the negligence of defendants in failing to timely commence a personal injury action on her behalf, she would have prevailed in that litigation. On July 4, 2002, plaintiff was walking through the lobby of the Trump Taj Mahal Casino Resort in Atlantic City when she slipped on a substance she identified as vomit. Plaintiff did not see any substance on the floor prior to her fall. She alleges that after she fell, a woman dressed in a blazer and holding a walkie-talkie, whom she believed to be a security guard, came over and told her to get up. When she tried to get up unassisted, she allegedly fell again in the vomit.
In the case at bar, plaintiff failed to introduce any evidence that the casino either created the dangerous condition, or had actual or constructive knowledge of it (see Mercer, 88 NY2d at 956). Plaintiff admitted in both her affidavit and deposition testimony that she has no information regarding how long the vomit was on the lobby floor prior to her accident, thus negating any possibility of proving constructive notice"

"In the final analysis, defendants' negligence in failing to investigate plaintiff's case and timely commencing an action does not relieve plaintiff of her burden of proving that she would have prevailed in that litigation but for defendants' negligence (see Brooks v Lewin, 21 AD3d 731, 734 [2005], lv denied 6 NY3d 713 [2006]; Russo v Feder, Kaszovitz, Isaacson, Weber, Skala & Bass, LLP, 301 AD2d 63, 67 [2002] ["[A] failure to establish proximate cause requires dismissal regardless of whether negligence is established"]). "

"

Shaw, Licitra, Gulotta, Esernio & Schwartz PC v. Hahn, 039977/06
Decided: March 20, 2007

Judge Andrew M. Engel

NASSAU COUNTY
District Court

Judge Engel

The Defendant moves for an order dismissing the Complaint herein, pursuant to CPLR §3211(u)(4), imposing sanctions upon the Plaintiff, pursuant to DR 7-102, DR 7-104, 22 N.Y.C.R.R. §130-1, and 22 N.Y.C.R.R. §130-1.1, prohibiting the Plaintiff from filling my further legal actions against the Defendant and awarding the Defendant damages.

The Defendant seeks dismissal of the present action, alleging that there is a prior action pending for the same relief, between these parties, in the Supreme Court of Nassau County. The Defendant submits a copy of the Summons and Complaint in such action, entitled, Shaw, Licitra, Gulotta, Esernio & Schwartz, P.C. v. Christopher Hahn, hearing Index No. 256/05, (the "Supreme Court Action"). The Plaintiff neither opposes this motion not denies that the action before this court seeks the same relief as is sought in the pending Supreme Court Action. Additionally, a comparison of the two (2) Complaints confirms that the relief sought in this action is contained within the relief sought in the Supreme Court Action.

Accordingly, the Defendants' motion to dismiss the Complaint, pursuant to CPLR §3211(a)(4), is granted; and, the Complaint is dismissed.

The Defendant seeks the imposition of sanctions against the plaintiff for the commencement of this action, alleging that same was commenced for the sole purpose of harassing the Defendant. As evidence of such harassment, the Defendant not only points to the fact that the Plaintiff, a law firm representing itself, knew there was a prior action pending at the time it commenced this action, but alleges that this is the second time the Plaintiff has commenced the identical action in this court.

The Defendant alleges that in January 2006 the Plaintiff commenced an action against the Defendant, in this court, which was identical to the action presently before the court. A copy of the Summons and Complaint in that action (the "Second Action"), dated January 18,2006, is provided to the court. A comparison of the Summons and Complaint in the Second Action and the Summons and Complaint in the action presently before the court reveals that they are identical. This is not disputed by the Plaintiff.

The Defendant further alleges that following service of the Second Action counsel for the Defendant contacted Plaintiff which agreed to withdraw the Second Action. According to counsel for the Defendant, however, he has never received confirmation that the Second Action was withdrawn. Defendant does not however, allege that the Second Action is actually still pending.

The Official Compilation of Codes, Rules and Regulations of the State of New York, 22 N.Y.C.R.R. §130-1.1, provides, in pertinent part:

(a) The court, in its discretion, may award to any party or attorney in any civil action or proceeding before the court, except where prohibited by law, costs. in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct, as defined in this Part. In addition to or in lieu of awarding costs, the court, in its discretion may impose financial Sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, Which shall he payable as provided in section 130-13 of this Subpart. This Part shall not apply to town or village courts, to proceedings in a small claims part of any court, or to proceedings in the Family Court commenced under article 3, 7 or 8 of the Family Court Act.

(b) The court, as appropriate, may make such award of costs or impose such financial sanctions against either on attorney or a party to the litigation or against both. Where the award or sanction is against an attorney, it may be against the attorney personally or upon a Partnership, firm, corporation, government agency, prosecutor's office, legal aid society or public defender's office with which the attorney is associated and that has appeared as attorney of record. The award or sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.

The rest.

Highly respected attorney Thomas Hyland, of Wilson Elser, writes in the NYLJ, in part:

"We write in response to your article, "Judge Orders Firm to Disgorge Fees Over Ethics Breach," (NYLJ, April 5, page 1) which discusses Justice Marcy S. Friedman's decision in Ulico v. Wilson, Elser, Moskowitz, Edelman & Dicker, granting partial summary judgment against our firm. The article notes that Wilson Elser is an "insurance defense giant." We are proud of our reputation and standing in the insurance defense and greater legal community. We have built this reputation with over 30 years of exceptional service to our clients, and in accordance with the highest ethical standards.

With all due respect, Justice Friedman's decision is flawed and contrary to the law and facts. As is the right of any litigant aggrieved by the order of a lower court, we intend to appeal. Unfortunately, an erroneous decision may do damage, even if ultimately overturned. While it would be impossible to demonstrate in this forum all of the problems underlying the court's decision, we feel compelled to note the following:

The court stated that "the facts relevant to [the claim of breach of fiduciary duty] are largely undisputed," yet failed to heed the most important undisputed fact: Wilson Elser did not represent two parties having adverse legal interests. Rather, the claim concerns the propriety of Wilson Elser doing work for an existing client that was potentially adverse to the business interests of Ulico. This is a question of interest to all lawyers. If, for example, a lawyer assists a restaurant in obtaining a liquor license, does he violate his ethical obligations to that client if he also helps another restaurant on the same street obtain a license? A "competitor" is simply and obviously not an "adversary."

Here's the rest of the letter.

The NYLJ reports "An attorney who violates the state's official Codes, Rules and Regulations (NYCRR) by failing to obtain a written retainer agreement or letter of engagement from a client in a nonmatrimonial case can still recover fees, an appeals court held last week in a ruling of first impression.

An unanimous panel of the Appellate Division, Second Department, said its interpretation of the rule, 22 NYCRR 1215.1, would not render it "impotent and unenforceable," as the appellant in Seth Rubenstein, P.C. v. Ganea, 2005-07813, had alleged.

Attorneys who fail to heed Rule 1215.1 place themselves at a marked disadvantage, as the recovery of fees becomes dependent upon factors that attorneys do not necessarily control, such as meeting the burden of proving the terms of the retainer and establishing that the terms were fair, understood, and agreed upon," Justice Mark C. Dillon (See Profile) wrote for the court. "There is never any guarantee that an arbitrator or court will find this burden met or that the fact-finder will determine the reasonable value of services under quantum meruit to be equal to the compensation that would have been earned under a clearly written retainer agreement or letter of engagement."

Since 2002, attorneys have been required to obtain retainer agreements or letters of engagement from all non-matrimonial clients under 22 NYCRR 1215.1, a rule that was created by the four Appellate Divisions (matrimonial cases are governed by a stricter rule, 22 NYCRR 1400.3).

The Second Department examined the implications of the 2002 rule after numerous trial courts reached different conclusions ."

From Law.com 

"Beginning in the fall of 2004, partners in Dallas-based Jenkens & Gilchrist who left the firm also left behind their capital contributions, which in some cases totaled hundreds of thousands of dollars, due to the firm's "contingent liabilities. The former Jenkens partners who left their cash behind may never see a penny of it, or they may recoup some of it, depending on what's left over after the firm covers all of its financial obligations in the wake of its closing on March 31.

Gilliam, a commercial litigator, says his primary job is to address litigation against the firm and to try to resolve 15 pending suits, which primarily are legal malpractice cases filed in state courts in Texas, New Jersey and California. He says the firm has "large exposure" in a couple of the suits, but "in those cases we feel like we have viable defenses."

"

Medical malpractice trial lost with $217 Million verdict, which could have been settled within policy limits for $ 4 million leads to a legal malpractice by doctor versus attorney. This article tells us:

"Among the claims against their former lawyers was the fact their lawyers turned down settlement offers of $1,000,000.00 for one doctor and $3,000,000.00 for the other doctor. The doctors claim that the proposed settlements were never adequately explained to them. The doctors say that their attorneys failed to properly advise them, fraudulently concealed information, and failed to respond to settlement demands.

The doctors' new lawyers who are suing their former malpractice defense lawyers state that the case should have never gone to trial, that it should have been settled, and claim that the doctors were "hung out to dry."

The malpractice case against the doctors seems clear. Their patient went to a hospital emergency room complaining of nausea, headache, dizziness, and double vision. The patient was essentially sent home five hours later with a painkiller prescription and a diagnosis of sinusitis. "

lthough the defendant doctors could not diagnose the condition, the patient in reality was having a stroke. He returned to the hospital with more severe symptoms the next morning, underwent surgery hours later to relieve brain swelling, and ended up in a coma for three months. When he awoke from the coma, he was permanently disabled. The patient, who was 50-years-old at the time was awarded $117,000,000.00 for economic damages, pain, and suffering. The doctors were then ordered to pay $100.1 million dollars in punitive damages. This was the largest jury verdict in Florida ever.

In the doctors' suit against their former malpractice lawyers, they claim that the lawyers who were hired by their malpractice insurance company were protecting the interest of the insurance company and not theirs. One of the doctors said he was pressured by the lawyers to say that he always gave a patient a physical exam and a patient history even if such an examination was previously performed by a physician's assistant. This doctor said he did not perform physicals on patients who had already been seen by a physician's assistant and that he did not remember personally examining the patient who sued him for malpractice. In spite of being informed by the doctors of the truth, the insurance company's lawyers continued denying that anyone except the doctor was involved in the patient's care and treatment

This article from the venerable Madison County Record reports that the Lakin Law Firm, which is a defendant in a big legal malpractice case arising from structured settlement loses, may now face loss of coverage.

"Lakin Law Firm founder Tom Lakin has sworn in a civil suit that he saw no liability on his part for the disappearance of money from structured settlements of his clients.

Clients of Lakin and other firms lost about $50 million eight years ago when the manager of their settlement funds, James Gibson, stole the funds.

Gibson was arrested in South America and went to prison in America.

Attorneys who had advised clients to trust him faced possible malpractice charges. Their insurers reimbursed the clients.

Lakin's malpractice insurers, however, have not paid. "

Since 2002 the Illinois State Bar Association Mutual Insurance Company has sought a Sangamon County circuit court order rescinding a malpractice policy it issued to the Lakin firm in 2001.

ISBA Mutual argues that it would not have issued the policy if the firm had not misrepresented facts in its policy application.

According to ISBA Mutual, the firm stated it did not know of claims or potential claims against it when the firm knew about such claims.

The firm switched its malpractice to ISBA Mutual from American National Insurance, later known as Great American Insurance.

In 2002 ISBA Mutual filed suit in Sangamon County for declaratory judgment against the firm.

Robert Chemers of Chicago wrote that before ISBA Mutual issued the policy, the firm advised clients of potential claims from Gibson's theft.

The Appellate Division has ruled that plaintiff bank has lost its attorney-client privilege with subsequent attorneys over the securities gone bad legal malpractice case against Chadbourne & Parke. 

"Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered November 23, 2005, which, to the extent appealed from as limited by the briefs, declared that plaintiffs waived the attorney-client privilege as to legal advice they received regarding compliance of their Russian operation with Russian tax laws and licensure requirements, affirmed, without costs.

Defendant sufficiently demonstrated that the advice it gave in the course of its allegedly negligent representation was framed, in this malpractice action, as the sole cause of plaintiffs' injury in Russia. Invasion of the attorney-client privilege is necessary, under these circumstances, to determine the validity of such claims, and is vital to the defense (see Orco Bank v Proteinas Del Pacifico, 179 AD2d 390 [1992]).

We have considered plaintiffs' remaining arguments and find them unavailing." 

Note Justice McGuire's dissent: " For these reasons, I would hold that by bringing this action plaintiffs did not put at issue, and thereby waive the attorney-client privilege with respect to, any advice they received on tax and licensure issues (Stark v Greenberg, Dauber & Epstein, 219 AD2d 571, 572 [1995] [communications between plaintiffs and their attorneys over issues not raised in malpractice action remain privileged]; TIG Ins. Co. v Yules & Yules, 1999 US DIST LEXIS 17607, *4-5, 1999 WL 1029712, *1 [SD NY, Nov 12, 1999] ["at issue" waiver recognized "where the party is in fact invoking the substance of the privileged conversation . . . or where the claim or defense is of such a nature that an assessment of its merits requires an examination of the substance of a privileged conversation"] [construing New York law] [emphasis added

Justice March Friedman ruled last week that Wilson Elser must disgorge $ 3 Million + fees based upon a  breach of fiduciary duty, and faces $100 in legal malpractice damages as the case progresses.  The story goes on:

"Insurance defense giant Wilson, Elser, Moskowitz, Edelman & Dicker has been ordered to disgorge millions of dollars in legal fees paid by an insurance client who accused the firm of helping another client set up a competing business.

In a March 29 decision, Manhattan Supreme Court Justice Marcy S. Friedman granted summary judgment to trustee liability insurer Ulico Casualty Co. on its claim that former counsel Wilson Elser breached its fiduciary duty by participating in a scheme to transfer Ulico policyholders to another insurer.

The judge ruled that there was "no triable issue of fact" about Wilson Elser's breach of its duty to Ulico and said the law firm had failed "to perceive its ethical obligation to Ulico."

"While Wilson Elser had the right to represent competitors ... it did not have the right to represent competitors in setting up a competing business to which it was contemplated that Ulico's accounts would be transferred," Friedman wrote in Ulico Casualty Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 602229/99.

"Put another way ... Wilson Elser did not have the right to prefer one client over another when the clients' interests diverged," the judge continued.

She ordered Wilson Elser to forfeit all legal fees it received from Ulico from Jan. 1, 1996, to June 30, 1999. Ulico has claimed it paid the law firm more than $3.4 million in fees during that time. The judge also permitted Ulico to go forward with other claims for legal malpractice and tortious interference with contract. Ulico has requested total damages from Wilson Elser of more than $100 million. "

Plaintiff attorney sued defendant client for legal fees and client counterclaimed for legal malpractice.  At trial plaintiff attorney lost and client won a verdict of $ 31,000 for legal malpractice.  The AD1 found that neither the fee case nor the malpractice case were proven. The malpractice case failed because although a conflict of interest was demonstrated, no deviation was shown.

This article is about medical malpractice, but it applies to legal malpractice. Examples?  When is a tax legal malpratice case complete?  is it on the day of the mistake, on the day of the filing, on the last date which a return may be filed, or when the IRS determines there was a mistake?

"Duty, breach, causation and injury: These are the traditional elements of a tort claim. Thus, under customary theories, a tort is inchoate unless and until the plaintiff suffers actual injury. For example, a plaintiff who has an increased risk of disease because she has been exposed to a defective product, but no manifest illness, would have no cause of action. Faced with this quandary, plaintiffs have resorted to novel claims and theories. They have argued, for instance, that recovery should be allowed for increased risk of future disease or for emotional distress"

The NYLJ reports:

Day Pitney Lawyers Let Off Hook in Malpractice Suit Over Arms-Dealer Loan
Mary Pat Gallagher
New Jersey Law Journal
April 4, 2007

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A company that loaned $3.5 million to a business owned by a man convicted of trying to sell military parts to Iran illegally cannot sue the lawyers it says failed to warn it of the risk.

A federal judge on March 30 dismissed malpractice claims against lawyers from Day Pitney and other firms, finding the lender should have sued the lawyers as part of its state court suit against the borrowers and that, in any event, it was the borrowers' fraud that caused the loss.

The case, Keltic Financial Partners v. Krovatin, 05-4324, stems from Daniel Malloy's 1997 arrest and indictment for the attempted sale of 20 Phoenix missile-battery components to Iran. The long-range air-to-air missiles were the type used on F-14A Tomcat jets, which the United States had sold to Iran before 1979, when the shah was overthrown and the country became an Islamic republic.

The NYLJ reports:

"Judge Bars Firm From Suing Ex-Client in Two Courts

By Rosamaria Mancini
New York Law Journal
April 4, 2007

A Mineola law firm cannot sue a former client over unpaid legal fees in both state Supreme Court and District Court if the causes of action are the same, a Nassau judge has ruled.

In Shaw Licitra v. Hahn, 039977/2006, District Court Judge Andrew M. Engel dismissed a suit brought by Shaw, Licitra, Gulotta, Esernio & Schwartz against Chris R. Hahn.

The decision will be published Monday.

"The court finds that such conduct was frivolous, being completely without merit in law, unable to be supported by any reasonable argument for an extension, modification or reversal of existing law, and undertaken primarily to harass or maliciously injure the defendant," Judge Engel wrote.

He imposed a $1,000 sanction against the firm and ordered it to deposit the funds in the Lawyers' Fund for Client Protection. A hearing will be held April 27 to determine how much the firm will pay in attorney's fees to Mr. Hahn. "

Barcelo v. Elliott is a Texas case which holds that privity is necessary for a legal malpractice case.  Here is an article from Baylor Law Review, the TexSupp which discusses the case, its holding, and how the courts have gradually whittled away the privity requirement.

As in other states, ocassionlly an attorney may be held responsible to non-clients.  Opinion letters, fraud, and some other conditions may apply. 

Its a short opinion, the Court of Appeals reversed and remanded this case for further proceedings.  Zorn v. Gilbert is a legal malpractice arising from a matrimonial.  In the opinion, the Court of Appeals determines the date of the judgment of divorce, and determines that the law firm continued to represent Zorn for some months thereafter.  Based upon this, the Court of Appeals found that the case was timely.

Here is access to a podcast interview with Oliver Hill, a civil rights attorney who was part of the NAACP 50's/60's legal push for civil rights, equality, and modernity.

"Civil rights attorney Oliver Hill is well known for the role he played in the landmark U.S. Supreme Court decisions that ended the doctrine of “separate but equal” and other forms of racial discrimination in the United States. One of the cases in which Hill was a key figure was NAACP v. Button. On its face, Button was a challenge to Virginia statutes defining and punishing attorney malpractice. The impact of the 1963 decision was, however, far greater. NAACP v. Button established the principle that active encouragement of public interest litigation is “speech” protected by the First Amendment – a principle that was critical to civil rights litigation."

Here is a very interesting article on the question of whether law, statute and judicial gloss all favor lawyer defendants in legal malpractice.  It compares treatment of medical malpractice to legal malpractice and concludes that the real question to ask is:  how will a decision in any given situation affect the legal community?

"This Article answers this question with the following jurisprudential hypothesis. Many legal outcomes can be explained, and future cases predicted, by asking a very simple question: is there a plausible result in this case that will significantly affect the interests of the legal profession (positively or negatively)? If so, the case will always be decided in the way that offers the best result for the legal profession.

The article presents theoretical support from the new institutionalism, cognitive psychology and economic theory. The Article then gathers and analyzes supporting cases from areas as diverse as constitutional law, torts, professional responsibility, employment law, evidence, and criminal procedure.

The questions considered include: why are lawyers the only American profession to be truly and completely self-regulated? Why is it that the attorney-client privilege is the oldest and most jealously protected professional privilege? Why is it that the Supreme Court has repeatedly struck down bans on commercial speech, except for bans on in-person lawyer solicitations and some types of lawyer advertising? Why is it that the Miranda right to consult with an attorney is more protected than the right to remain silent? Why is legal malpractice so much harder to prove than medical malpractice? The Article finishes with some of the ramifications of the lawyer-judge hypothesis, including brief consideration of whether our judiciary should be staffed by lawyer-judges at all. "

Union members often use attorneys who are provided by the Union.  After all, they pay union dues and deserve this free attorney.  However, when things go wrong, they cannot sue. 

"Claim of malpractice by the union's attorney rejected
Mamorella v Derkasch, App. Div., Fourth Dept., 276 AD2d 152

Lucille Mamorella asked the Appellate Division “to reject as against public policy the well-established rule that an attorney who performs services for and on behalf of a union may not be held liable in malpractice to individual union members where the services at issue constitute a part of the collective bargaining process.”

The Appellate Division declined to do so. The court said, "

Sound policy reasons as well as established precedent compel the conclusion that attorneys who perform services for and on behalf of a union may not be held liable in malpractice to individual grievants where the services the attorneys perform constitute a part of the collective bargaining process.

The court cited Peterson v Kennedy, 771 F2

Hinshaw reports this case:

"Indiana Court of Appeals Holds Excess Insurer May Not Sue Insured's Attorneys for Legal Malpractice

Querrey & Harrow, Ltd., et al. v. Transcontinental Insurance Company, __N.E.2d__, 2007 WL 505791 (Ind. App. 2007)

The court held that an excess carrier could not bring a legal malpractice action against counsel for the insured and the primary carrier under an equitable subrogation theory as such a theory would be contrary to the Indiana rule of non-assignability of legal malpractice claims. The court also held that on the facts as adduced, the excess carrier could not assert that it had an express or implied attorney-client relationship with counsel for the insured and the primary carrier.

This is really unheard of.  Jail for Disciplinary violations by an attorney. This, from the NYLJ:

"Panel Sentences Lawyer to 10 Days in Jail for Misconduct
Mark Fass
New York Law Journal
April 2, 2007

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An immigration attorney charged with 19 counts of misconduct -- including misappropriating payments, commingling funds and lying to clients about the status of their cases -- has not only been disbarred by the New York Appellate Division, 1st Department, but also fined $1,000 and sentenced to 10 days in jail.

Kemakolam Comas ignored numerous attempts by the disciplinary committee to communicate with him and failed to submit files as ordered or appear at disciplinary hearings.

"[T]he Referee's finding of contempt has abundant support in the record insofar as an order of this Court was in effect, respondent had knowledge of the order, he knowingly disobeyed the express and unequivocal directions set forth therein, and he intentionally impaired the rights and remedies of the Court-appointed Receiver concerning this proceeding," the panel said. "Indeed ... respondent's conduct throughout the course of this matter has been nothing less than astounding and his continued, blatant defiance ... requires us to impose a severe penalty."

Appel-Hole v. Wyeth-Ayerst Laboratories, 700000/98
Decided: March 27, 2007

Justice Charles Edward Ramos

NEW YORK COUNTY
Supreme Court

Justice Ramos
In motion seq. no. 007, Parker and Waichman LLP (P&W), on its own behalf and on behalf of its clients, moves pursuant to CPLR 2221 for leave to renew or reargue its motion to intervene (previously denied by order dated November 24, 2003). In addition to P&W, proposed intervenors referred to as the "Abramova Plaintiffs," also seek leave to intervene. In the event intervention is granted, P&W and the Abramova Plaintiffs seek disclosure of certain documents referred to as submissions in support of the amended order dated November 7, 2001, which approved the settlement of this action and will then seek to vacate that settlement order.1

In this action, known as the New York Diet Drug Litigation,

New York County Index No. 700000/98, plaintiffs asserted claims of personal injury and loss of consortium allegedly due to the ingestion of "fen-phen" diet drugs.2 Some of those plaintiffs and others are here challenging a settlement approved by our predecessor court (Freedman, J.) by her order dated November 7, 2001, which, inter alia, held that the terms of the settlement were fair and reasonable and conformed with all ethical requirements. In that settlement, defendant, American Home Products ("AHP"), offered a large sum of money3 to settle virtually all claims.4

The ethical issues raised in this case arise out of one of the thorniest areas in tort law - the process to be applied in the settlement of mass tort litigation. Because of the large number of claimants whose cases are settled at one time (in this case over 5,000), mass tort settlements often take the form of collective settlement structures. The alternative to a collective settlement would require the piecemeal analysis of the merits of each claim and individual settlements thereafter, as contemplated when the classic case dominated tort law (one injured plaintiff and one or more allegedly responsible defendants). This would consume the lifetime of many of the claimants themselves when there are thousands of claims to be compromised. As a consequence, counsel and the courts have devised means of settlement expedition, such as the placing of claimants in objective categories of severity of injury, age, gender, economic status, and each claimant's relationship to the acts of the defendant, and then entering into a mass settlement. Because of the large number of clients, great care must be exercised to insure that each client understands the settlement offer and is treated fairly. Ethical rules guide the actions of counsel in these circumstances.

This mass settlement was further complicated by the need to pay a portion of the attorneys' fees earned by settling counsel to other attorneys who referred additional clients. Therefore, claimants who were the original clients of the settling attorneys, Napoli Kaiser & Bern ("Napoli Firm"), would generate greater net legal fees for the firm than would clients who were referred to them by other attorneys (e.g. P&W and others).

The record on this motion, which includes a number of previously sealed documents and an affidavit of a former member of the Napoli Firm, has unfortunately raised serious questions regarding the settlement process herein, including claims that:

(1) claimants who were Napoli Firm clients were offered disproportionately larger settlements because the firm unfairly inflated settlement offers for its clients so that the attorneys' fees earned by the firm would be greater;

(2) unknown to the claimants, their cases were not settled for an amount negotiated for each claimant with AHP, rather their claims were settled based upon the Napoli Firm's own evaluation of the value of each claim in light of a lump sum offer;5

(3) the Special Master6 appointed by the settling court did not make individual evaluations of the settlement offers in each case as was represented by the Napoli Firm to its clients and to the settling court; and

(4) the ethics opinion submitted in support of the settlement was flawed and based upon less than a full understanding by the expert of the circumstances surrounding the settlement and the applicable law.

Notwithstanding the Napoli Firm's protestations to the contrary, no court, trial or appellate, has ruled on these issues in a contested hearing. This is explained by the fact that the order of compromise sought to be vacated here, dated November 7, 2001, was submitted to our predecessor court and executed, ex parte.7

The NYLJ reports this case:

Goldston v. Bandwidth Technology Corp., 112098/04
Decided: March 6, 2007 Justice Rolando T. Acosta
NEW YORK COUNTY
Supreme Court

"This matter, tried before the Court without a jury, primarily revolves around whether the retainer agreement executed by plaintiff Alan M. Goldston on behalf of his law firm, Goldston & Schwab ("G&S"), and Jonathan Star, Bandwidth Technology Corp. and Bandwidth Holdings Corp. ("Bandwidth")'s president, board member and shareholder, is enforceable. Pursuant to the retainer agreement, G&S would be compensated with two percent of the company stock. The Court, by order dated September 29, 2006, found, inter alia, triable issues of fact as to whether Star, as president of Bandwidth, a start-up corporation where informal action had been customary, had the authority to enter into the retainer agreement with G&S. The Court also found triable issues of fact as to whether the retainer was enforceable as a "general" retainer or unenforceable as a "non-refundable special retainer," which would entitle plaintiff to be compensated in quantum meruit only. The Court's Order was affirmed on September 21, 2006. Goldston v. Bandwidth Technology Corp., 32 A.D.3d 747 (1st Dept. 2006). "

Another blog blurb from Scottsdale:

"Attorneys know that deadlines matter, but in this age of electronic filing and 24-hour drop boxes it was just a matter of time before a court would have to address a filing that was, say, a mere six minutes late. That is what the United States Court of Appeals for the 10th Circuit had to deal with and this is what they had to say about it:

Six minutes seems trivial and unlikely to cause prejudice, but if six minutes can be excused, why not six hours or six days? As we discuss, there is a safety valve, but it lies with the district court and requires a timely application, which never materialized in this case. Ignoring established purposes and methods for extensions of time, Plaintiffs argue for different or additional relief. They are out of luck. Like statutes of limitation, statutes of repose, and other such time bars, rights may be irretrievably lost due to delay. "

Legal malpractice requires legal representation, while breach of fiduciary duty can be had by a non-attorney as the Scottsdale Personal Injury Lawyer tell us.

"Many people do not understand the difference between legal malpractice and breach of fiduciary duty.

Legal malpractice arises when an attorney owes someone a duty of care and, by an act or omission, the attorney's conduct breaches that duty of care and causes that person cognizable harm

Breach of fiduciary duty arises when there is a "special relationship" between an attorney and, typically a client, where trust or control over another's affairs are vested with an attorney. The major difference between legal malpractice and breach of fiduciary duty lies in the nature and scope of the applicable "duty."

Here is a divorce legal malpractice case from the Divorce Law Journal  which illustrates the "privity" question.

"Issue and Holding:
Whether an attorney owed any duty to an opposing party in a divorce case. The Court held no, the attorney owed no duty under the facts of this case.

Facts:
Baker filed for divorce from her husband, Collins, in 1989. A divorce decree, which referenced their Property Settlement Agreement, was entered in 1990. As part of the Agreement, Collins agreed to pay Baker $500,000. A balloon payment of $300,000 was due by January 1, 2002 and the remaining $200,000 due in ten annual installments of $20,000 continuing through January 1, 2001. The Agreement also provided that if the balloon payment was paid prior to the due date, the other payments would be forgiven. As security for the payments, Baker was given liens on all of Collin’s stock holdings of closely held corporations. Collin was to “execute all necessary documents to effectuate these liens” and “the Certificates shall be held by Ronald Coombs, Attorney.” Coombs represented Collins in the divorce proceedings and in other matters.
Despite the Agreement, Collins never gave Coombs any stock certificates before Collins died in September 1999. Coombs asked Collins for the certificates, but Collins never delivered them. Shortly before Collin’s death, Baker discovered that he had sold his interest in his largest corporation in 1992 without perfecting a lien in his stock holdings and making the agreed upon transfer to Baker. Baker did not know what happened to the other corporations, but none of them were listed as assets of his estate. Baker did not know whether any liens were ever prepared and she could not recall inquiring as to the liens or certificates prior to Collin’s death.
In November 1999, Baker filed a proof of claim against Collin’s estate for monies owed to her under the Agreement. The estate objected. Therefore in December 1999, she filed a complaint against the estate, Collin’s widow, and Coombs. Baker alleged that properties were transferred out of Collin’s name, prior to his death, in a deliberate attempt to prevent the payment of monies he owed to her and to reduce the inheritance of his child. She also alleged that Coombs failed to follow the terms of the Agreement in not holding the stock certificates and allowing Collin’s to sell his businesses without taking action to assure that Baker be paid what she was owed.
Baker was awarded a judgment against the estate. Baker and Coombs then filed cross motions for summary judgment. The trial court concluded that Coombs did not commit professional negligence and that he was not personally liable for the monies Collins owed Baker. The court held that Coombs signed the Agreement only in his capacity as Collin’s counsel, and not as a party to the Agreement. Therefore, only Collins and his estate could be held liable. Baker appealed. "

Appellate Law & Practice of California reports this legal malpractice case:

"CA1: Legal malpractice claims by 3d-party based on defrauded ponzi scheme fail
International Strategies v. Greenberg Traurig, 06-1790. This case involves a lot of people and firms that I really don’t want to smear. Not because I don’t like smearing, but because I think that most of the defendants here were trying to represent their clients in a good way, but their clients did a lot of bad things. If any of the people involve want to chime in, send me an email and I will prominently post your version of events or the law, or correct anything I got wrong (based on the published opinion.)

The underlying transactions are quite complex. But they ended in their ex-client suing their lawyers. ISG “invested” money with Corporation of the BankHouse ("COB"), who seemed to promise the impossible, and, of course, was a ponzi scheme. COB claimed that it was the victim of another scheme, and its CEO declared that "I have chosen to move to prepare litigation against the parties utilizing the law firm of Greenberg & Traurig [sic]. I have utilized the law firm of Seamin Cherin & Melott [sic] for the criminal assistance against the parties." Specifically, A. John Pappalardo began representing COB, and somehow COB convinced ISG to not independently sue the people that “defrauded” COB, because they would take care of it. Therefore, “ ISG alleges that these representations, and other events that we detail below, led it to believe that Pappalardo was ISG's legal representative and that an attorney-client relationship had been formed.”

Pappalardo kept telling everyone that he would recover the funds, but he never sued anyone. Eventually, “ISG finally retained outside counsel on November 7, 2001. Through counsel, ISG filed suit against COB and Pomeroy in March 2002. ISG obtained a $10 million judgment in that suit, but the award has proven uncollectible.” Then, ISG sued everyone.

The Story

"Four years of lawsuits and federal investigations had worn down the leaders of Jenkens & Gilchrist. Many of their biggest earners were leaving the law firm and taking their prized clients with them. And it had become hard to attract talent, with no end in sight for the firm's problems.

Also Online
04/01/07: IRS cuts, growing wealth gave rise to questionable tax shelters

04/01/07: Jenkens' collapse not an unusual case

03/30/07: Jenkens & Gilchrist closing after admitting role in tax fraud

03/23/07: Jenkens loses most of its Chicago staff

02/28/07: Jenkens & Gilchrist shrinking in wake of tax scandal

Graphic: Rise and fall (.pdf)
It was time to execute the last-ditch plan: dissolve the firm. Jenkens & Gilchrist couldn't be saved. So the firm's leaders had to try and save the people. "There is a timeline beyond which even the most loyal people say no," said former chairman Tom Cantrill. "It had just taken so long."

Founded 56 years ago and once the largest law firm in Dallas, Jenkens is closing its doors for good this weekend. What drove it to extinction was a combination of issues, including misjudgments tied to rapid growth and an aggressive drive to bring in business.

But above all, a risky tax shelter practice out of its Chicago office brought about the firm's end. The tax scheme, which Jenkens long defended but wound up admitting was fraudulent, left a cloud that would not disperse, according to interviews with nearly three dozen people inside and outside the firm.

Anthony Lin in the NYLJ reports:

"Federal prosecutors in Manhattan have entered into a nonprosecution agreement with Dallas law firm Jenkens & Gilchrist over its past involvement in illegal tax shelters, a scandal that has already fatally crippled the once-thriving firm.

Between 1998 and 2003, the firm's Chicago-based tax shelter practice provided hundreds of legal opinion letters in support of tax shelters the Internal Revenue Service subsequently deemed illegal. The criminal probe of the firm by the Southern District of New York U.S. Attorney's Office followed several civil suits by tax shelter investors whose claims the firm has agreed to settle for $85 million.

As part of the agreement, Jenkens & Gilchrist will pay a $76 million civil penalty to the IRS, which estimates 1,400 taxpayers relied on the opinions. The firm also has pledged continued cooperation with an investigation of the firm or individual lawyers involved in the tax shelter practice "

Hinshaw reports that there is no insurance coverage for this attorney-attorney law suit over referral fees. "The Louisiana Supreme Court held that a lawyer’s claims made policy did not require the insurer to defend an insured lawyer who was sued by another lawyer for allegedly fraudulently inducing him to accept a client whose claim was time-barred"

Here is a report of the case in which Reed Smith is accused of conflict of interest and legal malpractice.

"In Axcan Scandipharm v. Reed Smith, Axcan, a pharmaceutical company, claimed that the firm engaged in an impermissible conflict that led to disclosure of confidential information by the firm to a second client.

According to an opinion written by Philadelphia's Commerce Case Management Program Judge Howland W. Abramson, Reed Smith represented Axcan in a patent litigation case brought against the company in federal court. Axcan was indemnified by American Home Products Corp. (AHP) -- which is now known as Wyeth -- and/or Eurand International, and AHP/Eurand paid Reed Smith for its representation of Axcan under that indemnification agreement, Abramson said. "

Man wrongfully convicted of murder, now exonorated and released.  He brings a suit against all, including his attorney.  An article on the case.

Long a question in legal fee cases is whether the cost of electronic legal research [monthly, or per case] is part of the general overhead of a lawfirm, or a cost which may be awarded to the successful attorney?

Here is a case: Insinga v. Cooperative Centrale Raiffeisen Boerenleenbank B.A., 03 Civ. 7775
Decided: March 12, 2007  District Judge Richard J. Holwell  U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK  [case viewable by subscription] which holds that electronic legal research costs are recoverable in the 2d Circuit.

Here is a quote from the case.  Note that the court also awards fees for bringing the motion for fees.

"With respect to costs, although plaintiff has outlined the types of costs for which he requests reimbursement, he has not yet submitted figures to the Court. Defendants have reserved their right to respond to plaintiff's specific requests after he submits a bill to the Court. In the meantime, defendants object to one category of plaintiff's request: reimbursement for electronic legal research. The Second Circuit has made clear, though, that "charges for such online research may properly be included in a fee award." Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 369 F.3d 91, 98 (2d Cir. 2004); see also James, 2005 U.S. Dist. LEXIS 5401, at *67 ("Legal research costs are recoverable in an application for attorneys' fees."); Raniola v. Bratton, 2003 U.S. Dist. LEXIS 7199 (S.D.N.Y. 2003) (awarding cost of Westlaw research because, "absent the use of computer research, the awarded attorney's fees would probably be larger" (internal citation omitted)).

The Court therefore directs plaintiff to submit a bill detailing the costs for which it seeks reimbursement, including electronic legal research, within thirty days of this Opinion. The Court also grants plaintiff leave at that time to submit a supplemental motion for the legal services rendered after the date this motion was first served, which, among other things, will presumably include records for time spent defending this motion and preparing plaintiff's opposition to defendant's unsuccessful motion for judgment as a matter of law. See also Weyant v. Okst, 198 F.3d 311, 314 (2d Cir. 1999) (permitting compensation for time spent after the initial fee application, including time spent in preparing and defending an application for fees). "

When we search the web for news and articles about legal malpractice, the term often pops up as a sort of generic "wrong" when it neen not really apply. This publicity release seems to be one of those instances. 

"High-profile United States Attorney Patrick Fitzgerald's office is defending three employees of the Internal Revenue Service (IRS) and U.S. Attorney Lynne Murphy for their part in a purported $9 million tax fraud. They have been sued in the Northern District of Illinois for allegedly fabricating and falsifying IRS tax records.

Henry has sued the United States Department of Justice, the IRS and all individuals involved, for fabricating and falsifying this deficiency notice and for ignoring the Supreme Court rulings. Based on the evidence that the IRS claims it has in its possession Goldman Sachs, Cisco Systems and Henry Paulsen along with the IRS and the U.S. Government withheld records and evidence in the Delaware bankruptcy filing of American Metrocomm Corporation. Henry is claiming civil damages for legal malpractice, bankruptcy fraud and damages against the government and its individual employees for creating and falsifying government tax records and for withholding documents from the bankruptcy court. "

However, Ms. Murphy maintains that a U.S. attorney can commit fraud and ignore Supreme Court rulings while working for the U.S. Government, because the U.S. Government and its employees are immune to lawsuits under so-called “sovereign immunity.” In the meantime, Ms. Murphy continues to work on tax-related cases.

the New York Post is rarely a cite for us.  Here is a legal malpractice story from the Post about the subway hero and legal malpractice.  It can creep into almost any story.

"The Subway Superman who risked his life to save a fellow straphanger says he was taken for a ride and then thrown under the bus by a smooth-talking lawyer and her business partner"[The lawyers'] conduct in seeking to extract money from schoolchildren . . . is causing damage to his reputation and portraying him in a false light as a man of greed," the suit says.

His legal-malpractice suit seeks unspecified "damages for injury to plaintiff's good name and reputation" from the pair's conduct "in seeking to profit from his name."

Kleiman said her deal with Autrey was "very fair" - and she was just doing what Autrey and his family had asked her to do. "It's very cut and dry," Kleiman said. "

Here is a short article with this message:  dabble at your own risk of legal malpractice.

"Bankruptcy is widely recognized by lawyers who do not practice in that area regularly as such a specialized area that they do not “dabble” in it, as many general practitioners do in other areas. Example: a lot of “GP” lawyers will offer a variety of services - drafting wills, representation in DUI and other criminal matters, personal injury litigation, and real estate, to cite but one example I know of - and will entertain “becoming competent” through self-study in a new area (as the rules of professional conduct explicitly provide), but will steadfastly refuse to file bankruptcy petitions. The reason: it’s recognized by many to be so complex that the GP is asking for trouble - i.e., a malpractice claim - if s/he “dabbles” and messes up. "

Justice Ramos of Supreme Court, New York County is handling a strange case.  Plaintiff sued American Home Products in a Phen-Fen case with Napoli Bern being lead counsel.  A conflict exists between their direct clients and the rest of the group. 

"A New York state judge has ordered a trial to determine whether the law firm that negotiated a massive settlement with the maker of banned diet drug fen-phen violated ethical rules by apportioning the settlement in a manner designed to inflate the firm's share of the funds.

In 2001, the firm now known as Napoli Bern Ripka sued American Home Products (AHP), now known as Wyeth, on behalf of around 5,000 former users of fen-phen (dexfenfluramine), a diet drug recalled by the Food and Drug Administration after studies linked it to heart valve damage. American Home settled the suit under confidential terms, though the settlement has been estimated to be over $1 billion.

But in a decision issued Tuesday, Manhattan Supreme Court Justice Charles E. Ramos said there were serious questions about Napoli Bern's conduct in dividing and distributing the settlement that needed to be addressed in a trial. He cited in particular an affidavit submitted by a former attorney at Napoli Bern who said the firm had misled clients about the process.

The lawyer, Stephen David Murakami, worked on fen-phen litigation at Napoli Bern before being terminated in 2001 and then unsuccessfully sued the firm for allegedly unpaid bonuses. In his affidavit, Murakami said the firm had told clients their portions of the settlement had been individually negotiated with American Home, when in fact they had been solely determined by Napoli Bern.

"The representation to a client that a specific dollar amount was offered in a negotiation with the defendant to settle the client's case, when in fact the settlement offer was by the client's own attorney made upon the attorney's evaluation, if true, represents a serious breach of duty to the client," Ramos wrote in New York Diet Drug Litigation, 700000/98.

According to Murakami, a major determinant in the size of a client's share was whether he or she had retained Napoli Bern directly or been referred by another firm. Napoli Bern allegedly inflated the settlement payments of its direct clients because its fees from those clients would not be reduced by referral fees.

A hearing raises the possibility that the prior settlement could be modified or even vacated. The judge said the allocation of settlement

The aphorism is that bad cases make bad law.  In this particular case, an attorney, now disbarred, has been holding on to case files, demanding payment.  So far, not so bad.  However, today, sheriffs were ordered in to look for the files, after contempt findings.

"A half-dozen sheriff's deputies raided a disbarred attorney's office last week in search of the 43 boxes of files he has refused to hand over to the law firm that has taken over his biggest case, a wrongful-death action filed by a Bronx woman on behalf of her husband, a ship-rigger who plummeted to his death at the Brooklyn Navy Yards.

For all practical purposes, the deputies came out of Kenneth Heller's office empty-handed.

"None of the records we've been seeking [were] there," said Michael S. Feldman, a partner at Jacoby & Meyers, who, with Terry D. Horner, now represents the plaintiff, "No trial notes, no photographs, no witness statements, no pleadings. The only thing that was there was the record . . . generated as a result of my efforts to obtain the file."

The dispute over the case files began in the summer of 2004. Having first lost her multimillion award and then her attorney in just over a month, Ms. Emanuel, a Bronx mother of two who had recently filed for bankruptcy, turned to Jacoby & Meyers to take over her late husband's wrongful-death claim.

The firm has spent the last two-and-a-half years trying to recover her files.

In various court papers, Mr. Heller has demanded from $2 million to more than $12 million in fees, as well as $300,000 to $400,000 in unitemized disbursements, before turning over the documents "

Keeping up to date is one way to avoid legal malpractice problems.  Here is a case from the Court of Appeals.  Notice the "immediately"

"We have recognized only two exceptions to prior written notice laws — "where the locality created the defect or hazard through an affirmative act of negligence and where a 'special use' confers a special benefit upon the locality" (Amabile v City of Buffalo, 93 NY2d 471, 474 [1999][citations omitted]). Further, "the affirmative negligence exception . . . [is] limited to work by the City that immediately results in the existence of a dangerous condition" (Bielecki v City of New York, 14 AD3d 301 [1st Dept 2005][emphasis added]). Here, plaintiff presented no evidence of who last repaved this section of the roadway before the accident, when any such work may have been carried out, or the condition of the asphalt abutting the manhole cover immediately after any such resurfacing. Next, even assuming that the special use doctrine applies to a manhole situated in a City public street, plaintiffs presented no proof of any special benefit conferred on the City. Finally, we note that the expert's opinion was not inadmissible merely because nearly four years elapsed between the accident and the expert's inspection of the site. Because the expert could not supply any reliable evidence as to the elements of the exceptions to the prior written notice law, however, whether the trial court erred in precluding the expert's testimony is a question that does not affect the outcome of this case. "

Here is a medical malpractice case in which a physician for the Workers Compensation board examines an injured worker, and tells him that a request for surgery will not be granted, and that the worker does not need surgery, only physical therapy.  Even though the examining physician is not plaintiff's doctor, he is denied summary judgment.

This medical malpractice case is of interest to legal malpractice practitioners, because it is a stong example of liability without privity.  Think for a while, and analogies come to mind.  A second opinion by an attorney?  An attorney for an insurance company turning down a claim?  An opinion letter? 

This case illustrates the problem of being ready for trial.  The case was scheduled months ahead, and presumably the expert was known at the time of trial.  However, the expert could not be coaxed into the courtroom.  Result?  Case dismised on failure to prosecute grounds.  AD affirms, but on failure to demonstrate prima facie case.  In either event, this is the end of the case.  Q:  Whose fault was nonappearance?

This case illustrates withdrawal by a defense attorney in a civil litigation, and how the court wrongfully directed that the case go on to trial without a short adjournment for defendant to get a new attorney.  Result?  Plaintiff tries case, gets verdict, defends appeal, loses appeal, and has to start all over again.  In the long run, perhaps not the best strategy. 

The New York Times reports that a Federal Grand Jury is hearing testimony on attorney fees taken in an American Home Products case settlement problem.  The problem is that when the case was settled for about $ 200 Million in favor of 440 plaintiffs, the attorneys misled state court judges and  did not tell them that retainers allowed the attorneys 30-33% contingencies.  Instead, they ended up with closer to 50%.  This settlement also netted a judge who ruled that a charity had to be set up with part of the settlement proceeds. He told the Kentucky Judicial Conduct Commission that he "didn't know" of the 30% retainers. The judge then left the bench to head up the charity.  According to the NY Times, Clients ended up with less than 40% of the settlement.

Is the question of legal malpractice at the back of litigator's minds?  It probably is, if only for the reason that good lawyers are always calculating whether they are doing a good enough job, or, for that matter, doing enough in a case.  Here is an example from overlawyered

"Well -- as Ted points out in the comments to her post -- I had said "thousands," not "millions." But the bigger problem with what she wrote is that she dramatically underestimates the burden and cost of litigation. We'll put aside the fact that her proposal -- to have paralegals file boilerplate responses -- would constitute legal malpractice on the part of the defense attorney."

The NY Court of Appeals has decided that the following items are necessary in a Court of Claims notice.  Failure to include them results in dismissal and presumably, legal malpractice.

Actions filed in the Court of Claims must enumerate the "total sum" of monetary damages being sought or they are invalid, the Court of Appeals decided yesterday.

A 5-0 ruling found that Court of Claims Act §11(b) specifies that five pieces of information have to be included in every claim filed for damages against the state with the Court of Claims. They are the nature of the claim, the time when it arose, the place where it arose, the items damaged or injury sustained and the "total sum" claimed. Kolnacki v. State of New York

BlawgIT and Law.Com "reports that a legal malpractice insurance carrier may be putting the kibosh on law blogs (blawgs). The article states that the insurance carrier, Executive Risk Specialty, a unit of Chubb, informed lawyer James Paone II, of Lomurro Davison Eastman & Munoz that lawyer blogging "is not a risk they are interested in undertaking."

Will there be a new question on legal malpractice insurance appllications, asking whether you have a web site, a blog site, whether you write, whether you lecture?

Keep tuned.

What are the elements of Professional Malpractice?

Malpractice is a professional's failure to use minimally adequate levels of care, skill or diligence in the performance of the professional's duties, causing harm to another. In New York, attorney malpractice is defined as a "deviation from good and accepted legal practice, where the client has been proximately damaged by that deviation, but for which, there would have been a different, better or more positive outcome."

The first element of a relationship between the client and the professional was previously discussed. The second element, deviation, is shown by evidence, not necessarily expert, which shows that the acts of the professional fell so below the good and accepted practice of law in New York, that a jury would be permitted to find that the acts below standard.

Expert testimony is necessary when the deviation is subtle; an example could be the failure to supply an affidavit of merits to restore a case marked off calendar, the failure to respond to a CPLR 3216 notice, or failures in response to a motion for summary judgment. Expert testimony is not always necessary however. None is needed to demonstrate the deviation in failing to file within the statute of limitations. Bad outcome do not necessarily equal a deviation. Furthermore, questions of judgment of strategic choice cannot serve as the basis of malpractice. An attorney is permitted the reasonable choice of strategy, if supported by acceptable reasoning. The strategic choice must be reasonable both objectively and subjectively. The difference between strategic choice and mistake are subtle, and create the most difficult cases.

The third element of proximate cause encompasses both the typical analysis that arises in all negligence litigation and the additional element of "but for." The plaintiff must demonstrate not only that the deviation was a substantial cause of the poor outcome, but must additionally show that "but for" the deviation there would have been a different, better or more positive outcome. An example of this potential difficulty arises in an automobile accident. No matter how many deviations are shown, it may be that the maximum insurance for the other driver limits the recovery. If that is true, it will be impossible to show that "but for" the deviation, more than the policy limit was available and could have been recovered from the defendant.

      It's not entirely clear how the relationship between Attorney Fishkin and Marlow arose with Attorney Taras but it appears that Taras referred cases to Fishkin, or Fishkin was hired by Taras to work on the cases. many settled, but Fishkin and Marlow were not paid. They sued Taras for legal fees and lost on the basis that they did not file retainer statements with the Office of Court Administration within 15 days. This rule applies in the 1st Department for contingent personal injury cases. See Justice Edmead's decision today.

"DEFENDANT ATTORNEY moved for summary judgment in this fee dispute with plaintiff attorneys, who claimed they were hired as outside counsel by defendants under an oral agreement to render legal services on personal injury cases in which defendants were retained by a client on a contingency fee basis. Defendants argued plaintiffs failed to file retainer statements in all nine of their claims under 22 New York Codes Rules and Regulations §603.7(a)(3), precluding them from recovering any legal fees. Plaintiffs argued the filing of a retainer statement was not a condition precedent to receiving a legal fee. The court stated an attorney who was retained by another attorney on a contingency fee basis in a personal injury action must file a retainer statement with the Office of Court Administration within 15 days of being retained. Thus, it stated as retainer statements were not timely filed in three matters and in the absence of proof retainer statements were timely filed in the remaining six claims, those actions could not be maintained, granting defendants' motion .

Here is a US District Court decision in the Offshore Express Inc. v. Milbank Tweed Hadley & McCloy LLP, 03 Civ. 4260  case, decided: March 13, 2007 , District Judge Paul A. Crotty  in the U.S. DISTRICT COURT,SOUTHERN DISTRICT OF NEW YORK .

At issue, in the statute of limitations case was whether "Milbank's representation in the reorganization and arbitration was one continuous representation in regard to a specific legal matter, or two representations covering separate and distinct matters. If the former, this action is timely; if the latter, the motion for partial summary judgment must be granted."

The short answer: "Conclusion: Defendant's motion is GRANTED. Plaintiff's claim for malpractice arising out of the reorganization representation is dismissed. The Clerk of the Court is directed to close out this motion. "

Read the case for an excellent discussion of continuous representation.

Here is a Kentucky case in which guardian of infants or "next friend" of infant hires attorney for an automobile accident case.  Infant later sues attorneys for legal malpractice.  Question:  when hired by guardian or "next friend" can infant later sue, or must that guardian sue?  Answer in Kentucky is that infant does have standing to sue.

STEWART V. BRANHAM 
2006-CA-000322
PUBLISHED: REVERSING AND REMANDING; TAYLOR
DATE RENDERED: 3/9/2007

Solo NY attorney represented California client in Oregon courts is permitted to sue for legal fees here in NY.

Fischbarg v Doucet ,2007 NY Slip Op 01964 ,Decided on March 13, 2007 ,Appellate Division, First Department .

"With the evolution of technology, it is clear that physical presence alone should not determine whether one has purposely availed itself of a state's rights and benefits for jurisdictional purposes. One court has recognized this fact, stating "lawyers and other professionals today transact business with their pens, their fax machines and their conference calls not with their feet" (see Bank Brussels Lambert v Fiddler Gonzalez & Rodriguez, 171 F3d 779, 787 [2d Cir 1999]). Indeed, the notion that a party need not have a physical presence in New York to be subject to CPLR 302(a)(1) jurisdiction is long recognized. In 1970, our Court of Appeals held that "one need not be physically present to be subject to the jurisdiction of our courts under CPLR 302 for, particularly in this day of instant long-range communications, one can engage in extensive purposeful activity here without actually setting foot in the State" (Parke-Bernet Galleries, Inc. v Franklyn, 26 NY2d 13, 17 [1970]). Thus, it is not determinative that defendants were not physically present in New York (see Pilates, Inc. v Pilates Inst., Inc., 891 F Supp 175, 179 [SD NY 1995] ["defendant need not actually enter New York to be viewed as transacting business in the state [under CPLR 302[a][1]"]). "

Nor does the fact that the litigation took place in Oregon, not New York, preclude plaintiff from suing his clients in New York for his fees (cf. Colucci & Umans v 1 Mark, Inc., 224 AD2d 243 [1996] [CPLR 302(a)(1) jurisdiction based upon out of state defendant's retention of New York lawyer to handle litigation in New York court]; Otterbourg, Steindler, Houston & Rosen v Shreve City Apts., 147 AD2d 327 [1989] [same]; Elman v Belson, 32 AD2d 422 [1969] [same]); see generally Liberatore v Calvino, 293 AD2d 217 [2002] [Rhode Island attorney subject to New York's long arm statute based upon his actions preceding the filing of an untimely complaint in a New York court]).

Hinshaw reports this case in which the court sanctioned four attorneys for conduct at a deposition, including one who instructed his client not to answer outrageous questions but who neither claimed a protected privilege nor applied for a protective order under FRCP 30(d).

"The court described this case as a “grudge match.” Id. at *1. Harvey C. Welch represented Erik Redwood in a criminal prosecution for battery. Mr. Redwood was convicted, and blamed Mr. Welch for ineffective assistance of counsel. In October 1998 Mr. Redwood, a white man, called Mr. Welch, a black man, a “shoe shine boy,” which led to a physical confrontation. A grand jury returned an indictment for a hate crime against Mr. Redwood. In addition, Mr. Redwood filed a battery claim in state court and Mr. Welch filed a defamation counterclaim. In the civil action, Mr. Redwood was represented by his wife, attorney Jude Redwood, and Mr. Welch was represented by Marvin Gerstein. The civil case ultimately settled and the criminal prosecution was dismissed.

The Redwoods then filed this federal civil rights action against the prosecutor in the hate crime case, Elizabeth Dobson, as well as Mr. Welch, Mr. Gerstein, the City of Urbana and one of its police officers. The Redwoods alleged the defendants’ actions violated their first amendment rights by discriminating against Mr. Redwood’s religion.

The deposition became heated when Mr. Danner began questioning Mr. Gerstein about his past criminal record, his prior problems with the state bar, his mental health, whether he had engaged in homosexual conduct and whether he was involved in any type of “homosexual clique” with other defendants in this action. Id. at *4. Richard Klaus, representing Ms. Dobson, stated his opinion that Mr. Danner had committed a misdemeanor under Illinois law by asking questions about Mr. Gerstein’s mental health. Mr. Webber stated that the questioning violated Rule 30 because is was intended to harass, and instructed Mr. Gerstein not to answer. Mr. Webber did not, however, follow the procedure outlined in FRCP 30 by claiming a protected privilege or making a motion for a protective order.

Things got even worse after a break was taken and Mr. Gerstein was questioned about whether he had consulted with his attorney during the break. Mr. Gerstein began playing “word games” and claimed “amnesia” regarding what discussions he may have had or what the word “consult” meant. Although the court did not review a videotape of the deposition, the Redwoods claimed that Mr. Gerstein gave Mr. Danner “the finger” during the deposition as well. Id. at *4.

The court found Mr. Danner’s conduct at the deposition shameful. Id. at *5. The court, however, did not limit its criticism to Mr. Danner. “Mutual enmity does not excuse the breakdown of decorum that occurred at Mr. Gerstein’s deposition. Instead of declaring a pox on both houses, the district court should have used its authority to maintain standards of civility and professionalism. It is precisely when animosity runs high that playing by the rules is vital. Rules of legal procedure are designed to defuse, or at least channel into set forms, the heated feelings that accompany much litigation. Because depositions take place in law offices rather than courtrooms, adherence to professional standards is vital, for the judge has no direct means of control.” Id. at *5. "

We the People USA, a franchise of do-it-yourself legal centers that hope to do to the legal profession what H&R Block did to tax accountants.  They sell legal forms, and in some instances have gone too far in "helping" clients. One customer wanted to start a malpractice case.

Morgese went to the store for help filing a malpractice suit. After writing his complaint, the manager, Julie Marie Jefferson, told him it was insufficient. So she rewrote it on her computer, accidentally giving the wrong address for the insurance company.

After the complaint was filed in court, a judge found it defective because of the incorrect address and threw out the complaint.

"I would have been better off going to a lawyer and doing it right," Morgese said. "It cost me more to fix the problem than I had coming to me."

* * *

Agency’s Former Counsel Held Liable in Contracting Scheme //  C.A. Says Conflict-of-Interest Statute Allows Recovery of Payments to Independent Contractor 

KENNETH OFGANG, of Metro News-Enterprise reports:

"The former counsel for the California Housing Finance Agency and a company in which he held an undisclosed interest must return payments made to the business under a contract with the agency, the Fourth District Court of Appeal ruled yesterday.

Div. Three affirmed a multimillion dollar judgment against ex-lawyer Robert L. McWhirk of Laguna Beach, former CHFA insurance director John Schienle, and Hanover/California Management and Accounting Center, Inc. An Orange Superior Court jury sided with the CHFA, which said the men schemed to enrich themselves at public expense by creating a company that did business with the agency while they were undisclosed principals. Following a seven-week trial, the jury found that all defendants committed fraud and negligent misrepresentation, that McWhirk and Schienle were liable for breach of fiduciary duty and conflict of interest, and that McWhirk had committed legal malpractice and breached his contract to serve as outside counsel. Jurors rejected Hanover California’s cross-complaint for breach of its contract with the agency.

Plaintiff wanted to buy a building, convert to a condo/coop and evict or buy out tenants.  It's a big time business in NY.  Problem?  The Unincorporated Business Law Professor's Blog reports this case: Yassky v. Meltzer, Lippe, Goldstein & Schlissel, P.C., 36 A.D.3d 420 (N.Y.A.D. 1 Dept. 2007).

"Plaintiff had retained the law firm to help him purchase certain real properties and to resell them. Plaintiff contended that Meltzer committed legal practice by failing to publish notice of the LLC’s formation, which resulted in an eviction proceeding brought by the LLC which was initially unsuccessful. Defendant Meltzer then filed a third-party complaint against another law firm that the LLC had hired to assist with tenant buyouts and eviction proceedings. The court concluded that it was Meltzer’s responsibility to publish the notice of the LLC’s formation and Meltzer was negligent in failing to do so. "

Here is a case reported by the Abstract Appeal Blog. Plaintiff's toxic tort case was lost through negligence.  His legal malpractice case was bifurcated, and he won the liability phase.  However, the jury detemined that there was no proximate case.  Ergo, no proximate cause, no damages. 

Hinshaw reports on a two step process which allows a law firm to require binding arbitration on legal fees in California.

"Under this decision, a California law firm’s insistence on binding arbitration is a two-step process. First, the firm must insert such a provision in its retainer agreement. Second, the firm must offer the client a right to non-binding arbitration under the MFAA. If the client fails to exercise this right, however, the firm may rely upon the agreement as written.

Dismissal - outright dismissal of a case for failure timely to file a note of issue, is becoming a well known event in many of the metro counties.  Unlike New York county, where extensions of the date to file a Note of Issue are regularly sought and granted, in Kings and Nassau, for example, the rule is file or die. 

Here is an example. "It is acknowledged by the movant that a Certification Order was issued by the undersigned on February 10, 2006 which directed that the plaintiff was to file a Note of Issue within 90 days or the "action is dismissed without further order of the Court. (CPLR §3216)." This Order was acknowledged by counsel appearing on that date on behalf of the plaintiff. (Motion Exh. 1). It is further conceded that the plaintiff did not file a Note of Issue within that 90 days. Plaintiff acknowledges receipt of a "Note of Issue Reminder" from the County's Administrative Judge, dated April 24, 2006, which reminded plaintiff specifically, that the Note of Issue was due on or before May 10, 2006, and which, again warned the plaintiff that a failure to file the Note of Issue would result in dismissal of the action pursuant to CPLR §3216. (Motion Exh. 4). Sturgess v. Zelman, M.D., et al. "

Why are we discussing this?  This one may yet be a legal malpractice case.  Even though the court seems to have excused the mistake of failure to file, plaintiff may be able to demonstrate that the affidavit of merits itself was lackluster, and could have been much better.  Had the affidavit cited the particular departure, then probably no dismissal.

File those notes on time!

Plaintiff is a doctor who was sued in medical malpractice for an Erbs palsy case.  He settled, and then turned to sue his attorney alleging that the attorney forced him to settle, failed to use photographs of the birth which woul have exonorated him, and allowing the doctor to be reported to the National Practitioner Data Bank.

The NJ Supreme Court reversed a summary judgment decision against the doctor, and the case continues in part:

Steinberg's remaining claims for damage to his reputation and for legal fees and costs resulting from the alleged legal malpractice should not have been summarily dismissed. Damage to reputation does not require proof of economic loss. Under the law of libel, damages are divided into three categories:

(1) Punitive or exemplary damages, where actual malice or recklessness is shown; (2) special damages, such as loss of business, which are recoverable only upon proof of loss of specific economic benefits; and (3) general damages which the law presumes to follow inevitably from a defamatory publication and which, therefore, are often recoverable without proof of injury.

[Bock v. Plainfield Courier-News, 45 N.J. Super. 302, 309 (App. Div. 1957).]

Where legal malpractice is alleged to have proximately resulted in damage to the client's reputation, as here, we see no reason to impose a more stringent proof requirement than is imposed by the law of libel. Thus, a client whose reputation has been damaged as a result of legal malpractice may recover general, or nominal, damages in the absence of "proof of loss of specific economic benefits." Ibid.

With respect to the legal fees and costs incurred in prosecuting the legal malpractice action, the Supreme Court in Saffer v. Willoughby, 143 N.J. 256, 272 (1996), held that "a negligent attorney is responsible for the reasonable legal expenses and attorney fees incurred by a former client in prosecuting a legal malpractice action." We have held that neither R. 4:42-9(a) nor the "American Rule" preclude such an award in a legal malpractice action. Bailey v. Pocaro & Pocaro, 305 N.J. Super. 1, 6 (App. Div. 1997). Accordingly, the motion judge erred in dismissing the legal malpractice action in its entirety.

Legal malpractice in criminal defense does not exist. Bluntly put, a criminal defendant may not successfully sue his criminal defense attorney absent a showing of “actual innocence”. This translates to: reversal, ineffective assistance of counsel determined by a CPL§ 440 motion or exculpation.

Scott H. Greenfield reports an interesting take on this issue in his  Simple Justice Blog.  Here is a short take from it:

Most criminal defense lawyers take comfort in the tacit understanding that the chances of being successfully sued are slim to none. Absent proof of actual innocence, even abject incompetence causes no harm. So that gives the defense lawyer a free pass in botching a case, true?

Unfortunately, the answer is, with certain exceptions, true. This emboldens some lawyers to act with utter indifference to their responsibilities to their clients. Failing to ask for a hearing, or give proper and timely alibi notice. Failing to inspect a crime scene or read the discovery. The dreaded motion to suppress identification when no ID notice was given. Falling asleep at trial, for god's sake. All terrible, but not necessarily actionable. Why? Because the defendant cannot prove actual innocence.”

Greenfield, a nationally recognized criminal defense attorney, television commentator and author, specializes in trials and appeals with offices in New York City.

A report from Hinshaw:

"After a union’s health care fund failed to pay numerous benefits on behalf of its members, suit was filed against the Fund’s trustees and the third-party administrator, alleging multiple ERISA violations. The trustees then brought a third-party complaint against their attorneys, alleging legal malpractice and breach of fiduciary duty. The district court dismissed all claims against the attorneys with prejudice. "

Law firm’s decision not to sue potential defendant could not be basis for malpractice claim because law firm acted reasonably where liability and damages were uncertain

Hinshaw reports:

Achtman v. Kirby, McInerney & Squire. LLP, ___ F.3d ___, 2006 WL 2720643 (2nd Cir. Sept. 25, 2006)

The United States Court of Appeals for the Second Circuit has held that law firms which served as class counsel in a securities fraud action are not liable for legal malpractice for failing to assert claims against the auditor of the securities issuer where the liability of the accounting firm, i.e. the auditor, was doubtful and damages were uncertain.

In April 1996, several class action suits were filed against Bennett Funding Group (BFG) alleging securities fraud based on an elaborate Ponzi scheme involving sham contracts and fictitious financial statements. The suits were consolidated and two law firms, the Kirby law firm and the Bernstein law firm, were appointed co-lead counsel. The class consisted of over 20,000 investors in BFG securities. Arthur Andersen & Co., which had audited BFG’s misleading 1989 and 1990 financial statements, was not named as a defendant. Mahoney Cohen, which had succeeded Andersen as BFG’s auditor, was named a defendant. A $125 million settlement, which included $14 million from Mahoney Cohen, was reached. Some BFG investors, represented by different law firms, had since filed individual actions against Andersen and in some instances had reached settlement agreements. In 1999, the firms representing those individual defendants attempted to bring a class action suit against Andersen on behalf of the BFG investors, but the suit was time-barred

A recurring question in legal malpractice is whether the attorney client privilege is waived by bringing the case.  While it is almost always waived as to the defendant attorney, for the most part it is not waived for other attorneys.  Here is a Florida case on the subject.

"Coates v. Akerman, Senterfitt & Eidson PA, 940 So. 2d 504 (Fla. 2006)

A Florida appellate court has held that a law firm accused of giving negligent advice in a matter cannot invoke the “at issue” waiver doctrine to pierce the attorney-client privilege for communications between the clients and other attorneys who advised them in the same matter. The court held that no “at issue” waiver could be found merely because the clients had other legal advisors concerning the same subject or because the law firm asserted a comparative fault defense in the malpractice action.

In the suit, former clients sued the law firm of Akerman, Senterfitt & Eidson, along with one of the firm’s shareholders, and a former firm lawyer, in connection with a “proprietary tax savings plan” and the establishment of a joint venture. Plaintiffs, Bobby and Deborah Coates (Coates), Bredel Corp., and two related entities, claimed that they received advice from the lawyers about the plan and the joint venture. Defendants denied any negligence and claimed that plaintiffs’ damages were caused by their own or others’ actions.

This is not per se legal malpractice, but it is a shocker.  In this Ohio Federal decision, the insurance broker is immune from suit for negligent failure to procure or for the procural of wrong insurance. 

"In Mafcote v. Genatt Associates, 2007 U.S. Dist. Lexis 10117 (S.D. Ohio Feb. 14, 2007), U.S. District Court Judge Susan Dlott held that an insurance agent or broker cannot be sued by a policyholder for negligence unless the insurance agent or broker committed an act or error that causes actual physical injury or property damage. The alleged failure to procure proper insurance coverage does not give rise to such a negligence claim. Under Mafcote, an Ohio insurance agent or broker cannot be sued for negligent failure to procure insurance or the right type of coverage. "

We predict that this will come up in a legal malpractice setting in the near future;  it might be that the attorney is sued for no coverage and he turns to the broker as a co-defendant.  Other senarios?  You pick 'em.

Doctor is successfully sued in medical  malpractice  to the tune of $ 116 Million now sues his defense attorneys for not settling in the $ 1,5 million dollar range.. 

"Doctors who lost a malpractice lawsuit to the tune of $116.7 million are now suing their lawyers, saying the attorneys were negligent.

A Hillsborough County jury in October ordered the doctors to pay Allan Navarro, who went to University Community Hospital in Carrollwood on Aug. 9, 2000, with nausea, a headache, dizziness, confusion and double vision. He was diagnosed with sinusitis and a headache and told to go home. Navarro returned the next day. A stroke left him in a coma for three months. Now, Navarro has no use of his arms or legs. According to lawsuits filed last week in Hillsborough Circuit Court, the doctors' attorneys turned down several settlement offers, ranging from $1.5 million to $3 million, and were negligent in their handling requests for information from Navarro's attorney"

This is a blog blurb from the subscription NJLJ site.  "A law firm defending itself in a legal malpractice case took an unusual tack: trying to avail itself of the plaintiff's expert — Fox News commentator and former state judge Andrew Napolitano — while trying to impeach his ethics history."

It looks as if defendant called plaintiff's expert as a fact witness, and then tried to branch out and sully his upcoming expert testimony.

Here is a blog blurg from Hinshaw:

"New York Court Holds Lawyers Retained By Insurer to Represent Insured May Have Duty to Put Excess Carrier on Timely Notice of Claim

Shaya B. Pacific, LLC v. Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 827 N.Y.S.2d 231 (N.Y.A.D. 2 Dept. 2006)

After a judgment was returned in excess of the primary policy limits, the defendant in the underlying tort case, plaintiff in this case, sued the defense firm for failing to put the excess carrier on timely notice of the claim. The lower court dismissed the case, but the appellate court reversed the dismissal and held it may be possible for a lawyer retained by the primary insurer to be liable for failure to investigate insurance coverage. The key is the scope of representation. "

Bankruptcy court is said to be full of conflicts of interest.  Here, there is a possibility that Pilsbury Winthrop will be divested of its lead counsel role and made to give back $4 million in fees. 

"An alleged conflict of interest could cost Pillsbury Winthrop Shaw Pittman its role in a long-running bankruptcy case -- and more than $4 million in fees.

A San Jose, Calif., bankruptcy judge has scheduled a March 19 hearing on a motion by the U.S. Trustee's office to disqualify the firm and disgorge the fees it has racked up representing SonicBlue since the electronics maker went belly-up four years ago.

The motion claims that in a 2002 opinion letter, issued before the company went bankrupt, Pillsbury assured senior note holders that SonicBlue would repay a $75 million bond obligation in full. Last September, the bond holders -- three hedge funds -- threatened to sue Pillsbury unless it indemnified them.

This, trustee's attorney Nanette Dumas wrote, underscored a conflict Pillsbury should have recognized from the beginning. The firm is "arguably 'on the hook' for any shortfall," because of the 2002 letter, Dumas wrote. With creditors in a bankruptcy often receiving a fraction of what they are owed, Pillsbury could be motivated to protect itself by not cutting the senior note holders' claim. "For ever dollar the senior note holders' claim was reduced, [Pillsbury's] corresponding exposure would increase," Dumas wrote. "

Plaintiff in this legal malpractice case was held personally liable for human hair import damages.  Turning to his lawyer, he was brushed off a second time.  The case is Xie v. Lin

"On January 9, 2006, pro se plaintiff, Chuanyu Xie ("Xie" or "Plaintiff"), filed a legal malpractice complaint against his former lawyer Chris Lin (a/k/a Xiaoyun Lin), the law firm of Chen, Lin, Li, & Jiang, LLP, the law office of Lin and Li, and the law office of De Hong (collectively "Defendants"). Upon Plaintiff's request, the complaint was dismissed with prejudice against the law office of De Hong. The remaining Defendants now move to dismiss the complaint against them pursuant to Federal Rules of Civil Procedure 12(b) (1), (2), and (6) - lack of subject matter and personal jurisdiction, failure to state a claim, as well as expiration of the statute of limitations. In the alternative, the law offices of Lin & Li request that all allegations in the complaint related to them be stricken pursuant to Federal Rule of Civil Procedure 12(e), motion for a more definite statement. For the reasons set forth below, the 12(b) motion is GRANTED and thus, I need not reach the 12(e) motion.

A collge student, who has already started a case for sexual harassment, has now widened the net to bring in an athletic director at the school on a theory of legal malpractice.  The Story.

"Kelly May, the UL graduate who sued her political science professor for sexual harassment last year, has added David Walker, UL's interim athletic director, to her lawsuit.
In the amendment to the suit, May also accuses Walker, an attorney, of legal malpractice. May states that she met with university officials and Walker in a meeting in the last week of September to discuss her complaints against political science professor Donn Kurtz. May alleges that university officials informed her that Walker acts as counsel for students in legal matters."

A collge student, who has already started a case for sexual harassment, has now widened the net to bring in an athletic director at the school on a theory of legal malpractice.  The Story.

"Kelly May, the UL graduate who sued her political science professor for sexual harassment last year, has added David Walker, UL's interim athletic director, to her lawsuit.
In the amendment to the suit, May also accuses Walker, an attorney, of legal malpractice. May states that she met with university officials and Walker in a meeting in the last week of September to discuss her complaints against political science professor Donn Kurtz. May alleges that university officials informed her that Walker acts as counsel for students in legal matters."

A collge student, who has already started a case for sexual harassment, has now widened the net to bring in an athletic director at the school on a theory of legal malpractice.  The Story.

"Kelly May, the UL graduate who sued her political science professor for sexual harassment last year, has added David Walker, UL's interim athletic director, to her lawsuit.
In the amendment to the suit, May also accuses Walker, an attorney, of legal malpractice. May states that she met with university officials and Walker in a meeting in the last week of September to discuss her complaints against political science professor Donn Kurtz. May alleges that university officials informed her that Walker acts as counsel for students in legal matters."

Know anything about civil forfeiture?  Up on the latest quirks?  If not, don't start a case without doing research!  This case tells us:

"The plaintiffs alleged in their complaint, inter alia, that the defendant was negligent for failing to become familiar with the forfeiture law and agreeing to the settlement terms without attempting to negotiate, and that his negligence was a proximate cause of their damages. While a legal malpractice action is unlikely to succeed where an attorney erred because an issue of law was unsettled or debatable (see Darby & Darby v VSI Intl., 95 NY2d 308, 315), an attorney may be liable for a failure to conduct adequate legal research (see McCoy v Tepper, 261 AD2d 592; Gardner v Jacon, 148 AD2d 794).

The defendant's contention regarding damages is also without merit. The plaintiffs are not obligated to show, at this stage of the pleadings, that they actually sustained damages. They need only plead allegations from which damages attributable to the defendant's malpractice might be reasonably inferred (see InKine Pharm. Co. v Coleman, 305 AD2d 151). In any event, the plaintiffs have pleaded actual damages.

The plaintiffs correctly contend that they were not required to submit an "affidavit" in opposition to the defendant's motion to dismiss pursuant to CPLR 3211(a)(7). CPLR 3211 allows a plaintiff to submit affidavits, but it does not obligate the plaintiff to do so on penalty of dismissal, as under CPLR 3212. If a plaintiff chooses to stand on the pleading alone, confident that the allegations therein are sufficient to state all of the necessary elements of a cognizable cause of action, he or she is at liberty to do so and, unless the motion is converted by the court to one for summary judgment, the plaintiff will not be penalized for not making an evidentiary showing in support of the complaint (see Rich v Lefkovits, 56 NY2d 276, 282; Rovello v Orofino Realty Co., 40 NY2d 633, 635). Furthermore, a verified pleading may be utilized as an affidavit whenever the latter is required (see CPLR 105[u]).

The plaintiffs also correctly contend that the court excessively credited the defendant's affidavit. The defendant's affidavit did not conclusively establish that the plaintiffs had no cause of action. It merely disputed some of the factual allegations of the complaint (see Skillgames, LLC v Brody, 1 AD3d 247, 251).

Finally, the plaintiffs correctly contend that the court improperly used a summary judgment standard in deciding the motion to dismiss. By focusing on the proof in the plaintiffs' submission in opposition, the court effectively treated the motion as one for summary judgment, which requires disclosure of all of the evidence on the disputed issues. The mere fact that a plaintiff cannot withstand a motion for summary judgment under CPLR 3212 is not controlling on a motion under CPLR 3211 (see Rovello v Orofino Realty Co., supra). If a court decides to treat a CPLR 3211 motion as a motion for summary judgment, it must first provide adequate notice to the parties, which it did not do here (id.). "

Plaintiff in a legal malpractice case submitted errata sheet in opposition to motion for summary judgment.  The deposition testimony supported defendant's position on the motion, and changes in the errata sheet were necessary to oppose the motion.  In this case.

"Plaintiff's errata sheets should have been struck
since plaintiff failed to timely submit a statement of the reasons for the numerous changes in his deposition testimony indicated thereon (see CPLR 3116[a]; Schachat v Bell Atl. Corp., 282 AD2d 329 [2001]; Rodriguez v Jones, 227 AD2d 220 [1996]).

Defendants' motions for summary judgment in this action to recover for alleged legal malpractice should have been granted since plaintiff's unrevised testimony and the affidavits submitted in opposition to the motions were insufficient to raise an issue of fact as to notice of [*2]the alleged defective condition, a "missing" ladder rung, and whether, but for the alleged malpractice, plaintiffs would have prevailed in the underlying action in which they were represented by defendants "

Legal malpractice cases seem to enjoy a higher level of scrutiny in motions to dismiss than do other species of law suit.  Perhaps this is just because it is lawyers examining the behavior of other lawyers.  Here is a case fron NJ on legal malpractice and a conflict of interest.

"Plaintiff, Frank Devone, appeals from a summary judgment dismissing his legal malpractice claim against defendant, Dominic S. Favieri, Jr., Esquire. The motion judge concluded that the records contained no evidence to establish proximate cause between defendant's allegedly improper conduct and the loss claimed by plaintiff. We agree with the judge's analysis and affirm. Defendant has filed a protective cross-appeal from the refusal by the motion judge to further determine that plaintiff's claim was precluded by principles of collateral estoppel and the entire controversy doctrine. In light of our disposition of the appeal, we will not address the arguments raised by defendant in his cross-appeal.

Material factual premises underlying Dugan's opinion are not supported by the record. Lack negotiated with the buyer on Marini's behalf to obtain the consulting agreement for Marini. There is nothing in the record to support the allegation that defendant participated in those negotiations. And, by letter of February 20, 1998, the buyer's attorney forwarded to Reilly a draft agreement of sale embodying the terms of the consent order in an expanded form. That agreement, although it was never signed, is significant because it contains a disclosure of the consulting agreement between the buyer and Marini. Indeed, that portion of the agreement is marked by a handwritten notation, apparently inserted by Reilly, following Marini's name, stating "and/or Frank Devone," indicating an effort by Reilly to obtain from the buyer's attorney a comparable or shared agreement to include his client. Further, Reilly's billing records and plaintiff's deposition make clear that Reilly reviewed the draft agreement with plaintiff.

Therefore, plaintiff and his personal attorney were on notice of Marini's consulting agreement with the buyer before the transaction was consummated. Plaintiff produced no evidence to suggest that the buyer would have had any interest in hiring him as a consultant. He produced no certification from the buyer and did not depose the buyer. Nor did he produce any evidence, or conduct any discovery that might yield such evidence, to suggest that the $150,000 was actually additional purchase money and that Marini did not indeed provide consulting services for the buyer. "

"A former Española judge who spent nearly three years in prison for crimes the state Supreme Court determined he shouldn't have been convicted of has filed a legal malpractice lawsuit against two of his former lawyers.
Charles Maestas is accusing Santa Fe attorneys Stephen Aarons and David Henderson of negligence in their handling of his case for failing to notice that the statute his convictions were based on didn't apply to judges. The lawsuit was filed Feb. 20 and is pending in state district court in Tierra Amarilla.
Aarons was the lead attorney representing Maestas during his 2003 trial on rape and bribery charges while Henderson represented Maestas during the appeal.
The suit names Aarons Law Firm PC and Downing and Henderson PC as defendants. Maestas is represented by Tony Scarborough, who couldn't be reached for comment late Thursday.
A jury convicted Maestas in June 2003 on five counts of rape and five counts of accepting a bribe in connection with allegations that he used his power as a judge to compel a woman, Suzette Salazar, to give him sexual favors in exchange for a promise of lenience in her traffic case. The jury acquitted him of a number of other charges. In August 2003, he was sentenced to three years in prison.
But the state Supreme Court overturned those convictions on Dec. 13, 2006, finding that Maestas had erroneously been prosecuted under a state anti-bribery statute that expressly excludes judges. By the time the high court's decision was handed down, Maestas had finished serving his prison term.
The question of whether Maestas had been convicted of a law that didn't apply to judges was initially raised by an attorney in the state Attorney General's Office. But while the Attorney General's Office conceded that the wording of the law made judges exempt, it argued that the Legislature made a mistake and asked the court to affirm the convictions.
Henderson, who argued passionately before the Supreme Court that Maestas' convictions should be overturned because he was convicted of a law that didn't exist, said he was disappointed and upset that he was being sued, given that he won the appeal for Maestas. Henderson had originally based Maestas' appeal on an argument that a faulty jury instruction had been given during the trial.

 The Article

Anthony Davis writes in the NYLJ:

"In 2001, the New York State Bar Association Committee on Professional Ethics, in Formal Opinion 749 (NYSBA 749) echoed Secretary Stimson's view in saying that "lawyers may not ethically use available technology to surreptitiously examine and trace e-mail and other electronic documents."

In this article we will consider NYSBA 749 in the light of two more recent opinions, from the ABA and from Maryland, and will show how they arrive at the diametrically opposite conclusion, and why their reasoning is preferable.

What is metadata? ABA Formal Opinion 06-442 (ABA 6-442) simply defines it as information which is "embedded" in electronic documents. More helpfully, the Maryland State Bar Association Committee on Ethics, in Formal Opinion 2007-09 (10/19/06) (Maryland 2007-09), defines metadata as: "information within programs (e.g., Microsoft Word/Excel/Power Point, Corel Word Perfect/Quattro Pro, Adobe Acrobat, etc.) which is not readily visible but which is accessible and which may include data such as author, dates of creation/printing, number of revisions, content of those revisions/previous versions, editing time, etc."

"Hopefully, the New York State Bar Association Ethics Committee will reconsider NYSBA 749 - in the light of NYSBA 782 as well as the ABA and Maryland opinions - and recognize that if gentlemen are careless enough to send a document containing metadata, then they have only themselves to blame if the recipients read it. In the interim, readers are reminded that ethics opinions from bar associations are just that - opinions - and do not represent binding expressions of law. "

The Legal Malpractice News blog reports:

"Upon entering a legal malpractice case to a trial court in Kentucky, the court stated to the jury:

Provided, however, a lawyer cannot be held responsible for errors in judgment or for advising a course of action even if that course of action ultimately proves to be unsuccessful.
The jury ultimately voted in favor of the attorney. However, recently, the kentucky Supreme Court reversed this particular verdict, blaming the trial court for leading the jury to believe that an attorney may not be held liable for errors in judgement. This seems to be the infamous "judgemental immunity" defense. "

From the Legal Malpractice Insurance blog:

"On Monday, February 20, 2006, the Illinois Supreme Court submitted an opinion in a legal malpractice case, which has now changed the way the doctrine of void ab initio will be used in Illinois. For 92 years the Illinois supreme court have used the U.S. Supreme Court case Norton v. Shelby County as an example to follow in ruling a void ab initio scenario"   Check their site for the case.

From The Briefcase Blog:

8th District affirms $2.4 million legal malpractice award where plaintiffs claimed that lawyers’ lack of preparation led to inadequate settlement; excellent analysis of causation requirement in legal malpractice cases in Ohio.

Arnoff & Jacobs write in the 3/2/07 NYLJ about "informed Consent and Legal Malpractice"

"Even most laypersons know what informed consent is in the context of dental and medical practice. An interesting and important issue to address is when informed consent comes into play in a legal malpractice action, both as a claim and defense.

A review of recent cases and the Code of Professional Responsibility demonstrates that the doctrine is applicable in legal malpractice actions but only in defined and limited contexts where a decision has to be made as to a future course of conduct that will have a material impact on whether the objectives the lawyer was retained for will be accomplished.

The contexts where it is most evident are in the understanding of contracts that are not self-evident to the client, settlements and other compromises in litigation; material but variable conflicts of interest; the ongoing status of the matter for which the lawyer was retained, and fees."

This article is from the subscription Law.Com.  "LOS ANGELES - A publicist who entered into a fee-sharing agreement at the insistence of a client failed to demonstrate how she was damaged by the failure of a law firm to notify her that it had previously represented the client, a California court held Feb. 4 in affirming dismissal of her unfair competition law (UCL) claims (Arlett Vereecke v. Ziffren, Brittenham, Branca, Fischer, Gilbert-Lurie, Stiffelman & Cook, LLP, et al., No. B189284, Calif. App., 2nd Dist., Div. 4; 2007 Cal. App. Unpub. LEXIS 739). Full story on lexis.com"

This reversal report is taken from "Judicial Reports" which has a unique listing of all appellate reversals. "CIVIL PROCEDURE, LEGAL MALPRACTICE: Justice Gonzalez gave another litigant way too much leeway in another case. She let Juan Garcia make numerous changes in his deposition testimony, even though Garcia failed to timely submit a statement of reasons for the errata sheets. In his deposition, he was explaining the circumstances that gave rise to a personal injury claim against his employer, who had supposedly given him a ladder with a missing rung. That claim had been dismissed and Garcia was now suing his lawyer, Tom Stickel, for allegedly botching the case. The unrevised deposition and affidavits were insufficient to raise an issue of fact as to whether Garcia’s underlying personal injury claim would have prevailed but for Stickel’s alleged legal malpractice, said the Appellate Division. So Gonzalez should have summarily dismissed the malpractice claim instead of giving Garcia a belated chance to fill the gaps in his story. Garcia v. Stickel (February 27) "

This is taken from the Law.Com subscription site.  "The statisticians and insurers are constantly whining and warning about the increase in legal malpractice cases, attorney Claude E. Ducloux writes. Even the most respected firms are being caught up in the malpractice web, as changes in laws and attitudes have emboldened clients to complain publicly, loudly and with litigation. But Ducloux says there are certain steps that can improve a lawyer's chances of making it through those minefields -- and they're not expensive or difficult.

The case in subscription form

"Matter of Gonzalez v. Thelen Reid & Priest LLP, 114877-2006
Decided: February 9, 2007

Justice Carol Robinson Edmead

NEW YORK COUNTY
Supreme Court

"There are two separate and distinct classes of liens available to attorneys at law: (1) a general common-law or retaining lien on all property, including papers, books, documents, money or securities, belonging to the attorney's client which came into the attorney's possession in the course of the professional employment, and (2) a limited statutory lien on a specific fund or judgment on a cause of action or counterclaim, also known as a charging lien7 (In re Sebring, 238 AD 281 [4th Dept 1933]; In re Reiser, 137 AD 177 [1910]).

Here, the Law Firm's application to quash the Subpoenas at issue is premised upon the ground that it has a retaining lien on the subject documents.

"The purpose of an attorney's retaining lien involve inconvenience to the client" (Sorin v. Shahmoon Indus., Inc., 20 Misc 2d 149, 191 NYS2d 14 [Sup Ct, New York County 1959]). "The function of the lien is essentially one of compulsion-its aim being to assure payment of the fee due the attorney for services rendered" (Sorin v. Shahmoon Indus., Inc., 20 Misc 2d 149, supra]). Thus, the purpose of the retaining lien is to compel payment (Singer v. Four Corner Serv. Station, 105 NYS2d 77 [Sup Ct, Kings County 1951]), or secure payment of the reasonable value of the services which he or she "had rendered as attorney in the action and or for all services rendered for the client" (see Goldman v. Rafel Estates, Inc., 269 AD 647 [1st Dept 1945]). The retaining lien continues until the attorney's charges for all services which he or she has performed for the client have been paid, "not only those pertaining to matters relating to the papers or property in his hand at the time, but also for any balance due for other professional services" (In re Sebring, 238 AD 281, supra) (emphasis added). "

Anthony Lin in the NYLJ reports today that a Surrogate has recused himself over whether an attorney appearing before him made significant campaign contributions,  This appears to be happening more often, and when tied in with Clarence Norman style issues [insider attorneys, connections between judges and election payments] may well become a legal malpractice issue when a case goes sour.

"Suffolk County Surrogate John M. Czygier Jr. has removed himself from a case after receiving a recusal motion claiming that more than $29,000 in contributions from a lawyer appearing before him and the lawyer's firm raised questions about the judge's impartiality.

Rather than ruling on the merits, Surrogate Czygier (See Profile) stepped down because he would have had to review contribution records from his 2001 campaign to make a decision.

Under the state's Rules Governing Judicial Conduct, the surrogate wrote, he "is prohibited" from viewing those records, he concluded in Matter of Michiel, 527 A 2005. "

Here is a [subscription only] blurb from the NJLJ, which mirrors NY.  Fail to advise the carrier of  a potential claim, and you may not have coverage.  "An applicant for legal malpractice insurance who fails to disclose known facts that could lead to a malpractice claim, even if no claim has been filed, may be denied coverage as a matter of law, the New Jersey Supreme Court says."

For a new and interesting take on criminal law, look at Simple Justice.  This is a new blog on Criminal law by an extremely experienced practitioner, Scott Greenfield.

Here is a short but interesting list of things to do to avoid lawsuits.

"Eight steps to safeguard your business

Professional contract agreements. 

Documentation and tracking changes.

Checking work. 

Communications with the client.

Early recognition of potential disputes.

Early recognition of potential disputes.

Meeting budgets

Costs.

Time.

Fees and charges

Susan Cartier-Liebel's Solo Law Blog puts this argument forward:  mandatory legal malpractice insurance is unnecessary, because it would not benefit clients, only subject attorneys to sky-high premiums. 

She writes: "Huh? What I can tell you is this: forcing lawyers to purchase malpractice insurance for this purpose would itself be a crime. It's called extortion......

And the ones who will be harmed the most are solo and small firm practitioners who already struggle under the weight of malpractice insurance premiums. "

Hinshaw reports this case:

Client may not recover fees paid to criminal defense attorney whose representation was ineffective in part 

"The Vermont Supreme Court has held that a client is not entitled to assert a breach of contract action against a criminal defense attorney to recover fees paid for ineffective representation where at least some of the representation involved the provision of valuable services. Plaintiff, a client who was charged with federal crimes, retained defendant attorney to defend the charges. The attorney performed a substantial amount of work investigating the case and preparing for trial. The client was found guilty on all six charges and sentenced to prison. The conviction was upheld on appeal but the case was remanded for recalculation of the sentence. An increased sentence resulted, and it was affirmed on appeal. The client sought postconviction relief based on ineffective assistance of counsel due to the attorney’s failure to object to a jury charge. A federal district court dismissed the complaint, but a circuit court ruled that the jury charge on a reasonable doubt was improper. The circuit court remanded for a determination of whether counsel’s representation was ineffective.

On remand, the district court found that counsel’s representation was ineffective due to his failure to object to the improper jury instruction on reasonable doubt. A new trial was granted. The client pled guilty to one count and was sentenced to the 87 months he had already served.

The client then sued the attorney alleging claims for both legal malpractice and breach of contract. The contract claim sought to obtain return of the fees plaintiff had paid to defendant for preparing the case for trial and for trying the case. The trial court granted summary judgment for the attorney on the malpractice claim, ruling that a client must establish his actual innocence of the criminal charges to be entitled to recover for malpractice. The trial court denied summary judgment on the contract claim and found for the attorney on it. The trial court held that the client could not recover the attorneys’ fees he paid the attorney under a breach of contract theory because such a claim was in reality a malpractice claim and so required the client to establish his actual innocence. As the client could not establish his actual innocence because he pled guilty to one of the charges, the trial court ruled he could not establish proximate cause. The Supreme Court affirmed but for different reasons."

From the South Carolina Appellate Blog:

Friday, February 23, 2007
South Carolina Court of Appeals holds that attorney owes a duty to third parties to distribute settlement proceeds
In Moore v. Weinberg, after the settlement of litigation and receipt of proceeds, attorney distributed all the money and in the process overlooked an Assignment, which he drafted, of a portion of the proceeds to Wheeler. Wheeler sued the attorney for negligence. The trial court granted summary judgment in favor of the attorney and the Court of appeals reversed. According to the panel, the attorney drafted the Assignment and did not dispute that he had notice of it. The Rules of Professional Conduct and law from other jurisdictions established that the attorney owed a duty to Moore to disburse the funds. we conclude Weinberg owed Moore a duty to disburse the assigned funds to Moore.

Web CPAblog reports:

"Boston Firm Faces Malpractice Suit

Boston (Feb. 23, 2007) - Vitale Caturano & Co. is facing a malpractice lawsuit for allegedly failing to properly investigate a number of red flags that could have tipped a prominent New England family off to the looting of some $57 million from its trust funds. Advertisement

The Ayer Family Trusts holds several hundred million dollars for about 100 descendents of industrialist Frederick Ayer. Those trusts are managed under the Tenens Corp. (which does business as Essex Street Associates), and had been largely overseen by the corporation’s former chief operating office, and an employee of more than 30 years, John Doorly.

According to other court documents, Doorly engaged in the “systematic looting” of $57 million from the trust funds, much of it through the use of duplicate accounts -- spending freely on his wife, son, his mistresses; investing in shopping malls, car dealerships and sports marketing companies; and expensing amenities such as planes, limos, vacation homes and exotic golf trips.

Doorly was fired from the position in March 2006, but the Ayer family’s suit against Vitale Caturano claims that the Boston-based firm should have acted more quickly to investigate Doorly’s secrecy regarding a number of trusts, and notes that the funds suffered losses of more than $10 million during Vitale Caturano’s time as auditor.

According to the Boston Herald, in deposition filings Doorly has acknowledged that while he transferred Tenens funds to various accounts, they were merely loans that he intended to repay. "

A big change in the False imprisonment law, coupled with an analysis of 42 USC 1983 changes comes from the "lawyer Dude's" blog.

"This is a hopefully going to be a short post. Last week (in fact the day after the court heard argument in Rita/Claiborne) it announced its decision in Wallace v. Kato. The issue effects both criminal lawyers and civil rights attorneys (or for those of us at The Law Offices of Anthony J. Colleluori & Associates, PLLC. both sides of our brains.)
Up until now it was always the procedure, that after a person was arrested (and imprisoned) he would be able to sue the government, whether or not he filed a notice of claim against the county, by alleging the same behavior(e.g. false arrest and unlawful imprisonment) through the use of a 42 USC 1983 suit. In the US District Courts in NY, The statute of limitations was always thought to be within three years of the end of his incarceration and his prosecution whichever came later. "

"NO MORE

The court in its decision in Wallace has changed a number of things dealing not only with filing but also with pleading the case.

1. False arrest is a subset of unlawful imprisonment.
2. The statute of limitations for a 42 USC 1983 claim arising from an unlawful imprisonment claim is as long as the time one has to file a personal injury suit in the state where the action accrues. In New York State, that means 3 years.
3. The date of accrual begins on the date of arrest and the tort ends at the time of arraignment.
4. All the damages that occur after arraignment are properly recompensed in a Malicious Prosecution based suit not by a false arrest/unlawful imprisonment cause of action.
5. While a Malicious Prosecution based suit's statues of limitations may be tolled by the case of Heck v. Humprey, 512 US 477(1994), actions for false arrest and unlawful imprisonment are not so tolled.

Now here's the thing, we all know that it is easier to win a false arrest/unlawful imprisonment case, because it does not require that we win the underlying criminal action. We can accept a dismissal that is favorable on the issue of the arrest not the prosecution (ACOD's [ACD's for NYC Guys]; Dismissal in the interest of Justice, speedy trial dismissals). Malicious Prosecution based causes of action, requires a favorable termination of the prosecution itself. So in order to preserve the clients right to compensation, we have to go to trial, or at least get a "full surrender" from the DA on the prosecution's merits(a "no true bill" from a grand jury counts.) "

Astrada v. Archer, 34401/05
Decided: February 14, 2007

Justice Arthur M. Schack

KINGS COUNTY
Supreme Court

"The instant action resulted from a real estate contract that never closed. I granted summary judgment to plaintiff and made the following order on December 21, 2006, in relevant part:

that within 10 days after notice of entry of this order is served by plaintiff upon defendants, defendant Regina Felton shall refund to plaintiff Faith Astrada, by payment to her present counsel, James T. Gerardi, Esq., plaintiff's $30,000.00 down payment, together with accrued interest from April 19, 2005 to October 28, 2005, and statutory interest, at the CPLR §5004 rate of 9 per cent, from October 28, 2005 to the date of refund.

Further, I ordered a hearing on February 9, 2007, pursuant to 22 NYCRR §130-1.1, to determine if defendant Felton had engaged in "frivolous conduct," and to give defendant Felton "a reasonable opportunity to be heard," before possibly awarding costs and/or sanctions. Astrada v. Archer, 14 Misc3d 1206 (A), 2006 NY Slip Op 52432 (U).

Prior to the hearing, Mr. Gerardi notified Ms. Felton and this Court by mail, on February 1, 2007, that he had served Ms. Felton by first class mail and certified mail on January 3, 2007 with my Decision and Order. The certified mail return receipt shows that Ms. Felton's office received the Decision and Order on January 7, 2007. Ms. Felton filed a Notice of Appeal on January 22, 2007. Thus, there can be no doubt that Ms. Felton was served with my December 21, 2006 Decision and Order.

At the February 9, 2007 hearing, both Ms. Felton and Mr. Gerardi were present.

Ms. Felton admitted that she had not returned the $30,000.00 down payment together with accrued and statutory interest. Defendant Felton unequivocally stated that she had the $30,000.00 down payment in her escrow account. She presented no testimony or evidence that a stay of enforcement, pursuant to CPLR §5519, pending her appeal had been granted.

I reserved decision on whether or not Ms. Felton engaged in "frivolous conduct" and if so, what costs and sanctions shall be awarded. However, with respect to Ms. Felton's failure to comply with my Decision and Order to return the $30,000.00 down payment, together with accrued and statutory interest from April 19, 2005, it appears that Ms. Felton is engaging in conduct that may result in a finding that Ms. Felton is guilty of civil contempt.

Accordingly, it is

ORDERED that defendant Regina Felton, Esq. may be found guilty of civil contempt, in violation of Judiciary Law §763 (A), if 14 days after notice of entry of this order is served by plaintiff upon defendant Regina Felton, Esq., defendant Regina Felton, Esq., has not refunded to plaintiff Faith Astrada, by payment to her counsel, James T. Gerardi, Esq., plaintiff's $30,000.00 down payment, together with accrued interest from April 19, 2005 to October 28, 2005, and statutory interest, at the CPLR §5004 rate of nine per cent, from October 28, 2005 to the date of refund.

This constitutes the Decision and Order of the Court. ¦

Anthony Lin of the New York Law Journal writes:

"Thelen Reid Brown Raysman & Steiner's representation of the estate of a wealthy Mexican politician has landed the law firm in a controversy worthy of a steamy telenovela.

For over a decade, Robert J. Reger, a partner in the New York office of San Francisco-based Thelen Reid, was the lawyer for Emilio Martinez Manautou, a physician-turned-politician who held a number of positions in the Mexican government, including governor of the state of Tamaulipas, directly across the Texas border.

Mr. Reger advised Dr. Martinez on the creation of two trusts, the so-called Family Trust and the so-called EMM Trust. The latter, which contained $7 million, named as sole beneficiary a Texas woman, Alicia Trevino, who also had a 12 percent interest in the Family Trust. A source familiar with the situation described Ms. Trevino as Dr. Martinez' long-time mistress.

Mr. Reger was co-trustee of both trusts. Dr. Martinez died in December 2004, but his daughter Letizia Martinez de Gonzalez is now claiming Dr. Martinez came to suspect Mr. Reger and Ms. Trevino had developed a relationship. Based on his suspicions, Ms. Gonzalez alleges, Dr. Martinez removed Mr. Reger as co-trustee a few months before he died and also made plans to disinherit Ms. Trevino.

The main drama is playing out in San Antonio probate court, where Ms. Trevino has sued Ms. Gonzalez, who replaced Mr. Reger as trustee, over her alleged transfer of $4 million from the EMM Trust to the Family Trust, in which Ms. Gonzalez has a 50 percent interest.

But Ms. Gonzalez raised her allegations in Manhattan Supreme Court, where she sought an order directing Mr. Reger and Thelen Reid to produce documents and submit to depositions. She claims available documents already detail a pattern of suspicious communications between Mr. Reger and Ms. Trevino that suggest he has assisted her with her probate lawsuit.
"

Here is a medical malpractice statute of limitations continuous representation case which has implications for a legal malpractice case, too.  The rule is similar in both attorney malpractice and medical mal.

"A medical malpractice cause of action accrues on the date of the alleged act, [*2]omission, or failure complained of, and is subject to a 2½;-year statute of limitations (see CPLR 214-a; Young v New York City Health & Hosps. Corp., 91 NY2d 291, 295; Massie v Crawford, 78 NY2d 516, 519; Nykorchuck v Henriques, 78 NY2d 255, 258). However, under the continuous treatment doctrine, the statute of limitations is tolled " when the course of treatment which includes the wrongful acts or omissions has run continuously and is related to the same original condition or complaint'" (McDermott v Torre, 56 NY2d 399, 405, quoting Borgia v City of New York, 12 NY2d 151, 155).

The defendants Delia M. Keating, H. Dirk Sostman, M.D., P.C., and Strang Cancer Prevention Center (hereinafter collectively the defendants) demonstrated that the plaintiff commenced the subject medical malpractice cause of action after the statute of limitations had expired. In opposition to the motions, the plaintiff failed to show that the statute of limitations was tolled by the continuous treatment doctrine (see Young v New York City Health & Hosps. Corp., supra at 296-297; Massie v Crawford, supra; Nykorchuck v Henriques, supra at 259; see also Gaspard v Herard, 20 AD3d 504, 505). The evidence demonstrated that the defendants merely provided the plaintiff's decedent, Maria Pennisi (hereinafter the patient) routine annual mammograms and semi-annual breast examinations. Although the plaintiff submitted an affidavit from the patient in opposition wherein the patient averred that the defendants treated her for a specific breast condition, this was directly contradicted by the patient's deposition testimony. Thus, the Supreme Court properly granted the motion and dismissed the complaint insofar as asserted against the defendants. "

Plaintiff sues defendant attorney for legal malpractice, constructive fraud and unlawful imprisonment.  All fails but constructive fraud for misrepresenting the soft idea of experience in commercial law.

"There were triable issues of fact with respect to the cause of action for constructive fraud. Plaintiff Herbert Nason testified that he retained these attorneys based not only on a third party's recommendation, but on defendant Fisher's representation that he was experienced in handling commercial partnership cases (cf. Laub v Faessel, 297 AD2d 28 [2002]). The cause of action for false representation in violation of Judiciary Law § 487 was deficient for failure to establish the requisite "chronic or extreme pattern of legal delinquency" (Solow Mgt. Corp. v Seltzer, 18 AD3d 399, 400 [2005], lv denied
5 NY3d 712 [2005]), or that such alleged conduct was the proximate cause of any loss (see Jaroslawicz v Cohen, 12 AD3d 160 [2004]). The malpractice cause of action was also properly dismissed for failure to establish that the attorneys' conduct was the "but for" cause of any loss (see e.g. Berkowitz v Fischbein, Badillo, Wagner & Harding, 2006 NY App Div LEXIS 13445, 2006 WL 3290438), and, in light of the client's admission that the ultimate settlement of his underlying litigation was favorable, that there was any loss at all. Since the malpractice cause of action was deficient in these respects, it is immaterial that the defendant attorneys' alleged violation of Disciplinary Rules might otherwise constitute some evidence of malpractice (see William Kaufman Org. v Graham & James, 269 AD2d 171, 173 [2000]). As to the false imprisonment cause of action, the record reflects that defendants merely sought to prevent [*2]plaintiffs from taking attorney work product without payment.

Summary judgment was properly denied on the cause of action for breach of contract regarding allegedly excessive fees. The motion court properly employed its own knowledge, expertise and experience in determining that there was an issue of fact regarding the alleged overbillings (see David Realty & Funding, LLC v Second Ave. Realty Co., 26 AD3d 257 [2006], lv denied 7 NY3d 705 [2006]).

Our experience is that an Erbs palsy case is kind of hard to lose.  Most are settled, and the few that are not, generally have a good defense.  Here is a midwest juror's take on a lost Erbs palsy case.

"The first notice got lost, so when I got the warning noting my failure to report to jury duty three months ago, I quickly called and rescheduled to report on Feb. 5. "A day off. Yeah!" I thought.
Lucky me, I had a low number. After being picked and kicked off the jury for a rape trial, I was called up again a second time for a malpractice lawsuit. I had to sit for two hours that day, and one hour the next before the entire 14-member jury was completed. It seemed so many people had an excuse. Who knows whether they were legitimate or not.

For nine days, the 14 of us, eight men and six women of all ages and walks of life, sat listening to opposing viewpoints. It was like I was back in biology class. I took notes to remember the key points of each witness.

Several OB/GYN doctors, a neurologist and an orthopedic surgeon taught us all about the techniques to deliver a child with a shoulder dystocia, and treatment of brachial plexus (Erb's palsy) injuries.

Basically, two physicians were accused of using inappropriate procedures to deliver a child after he was delivered to the head and got stuck. Three others were being sued for failure to conduct a last-minute ultrasound to determine birth weight and offer the woman a C-section since, the plaintiff's attorney argued, there were signs that she would deliver a large baby - he was 10 pounds, 6 ounces at birth - and since she had other risk factors for dystocia.

The methods and procedures were drilled into our heads, over and over again. The standard of care expected of doctors delivering a child in 1998 were drilled into our heads. We saw diagrams, were given demonstrations, and heard testimony from experts paid $5,000 a day to testify.

It was dry, technical stuff but a bit interesting. The Worcester Superior courtroom was cold, and steaming hot in our waiting room. At times, bored from hearing the same thing, I stared at the ceiling, counted the molding, and glanced at the portraits of judges on the walls.

The trial had its emotional parts, like when the mother, in the last stages of pregnancy with her third child, took the stand. The woman, a native of Ghana, seemed to have a hard time understanding some questions.

Something told me she didn't like being in court. She told us how she has to brush her son's teeth, tie his shoes, and feed him. She told us how her boy, now 8 and with limited use of his right arm, is often teased by schoolmates. She said since he was born, she could not hold a job since she had to spend so much time caring for him.

Early into her testimony, she closed her eyes, started sniffing and broke down in tears. It was real. I had to look away. I had to try my best to block out the emotions, to not let it cloud my opinion.

The medical records, common sense, my experiences raising a child with limited use of one hand, the fact that the woman was not diabetic and other inconsistencies in the case were the keys that persuaded me to side with the entire jury. In less than 20 minutes of deliberation, we decided that the five doctors were innocent of negligence.

I felt good that we did the right thing, and bad that one side had to lose, that the plaintiffs left the court probably feeling they were wronged once again. I agreed with one juror who wondered whether the now divorced couple's situation would have turned out differently if they were wealthier, and could have afforded a private doctor.

As a juror, I didn't see this as one side telling the truth and the other a lie, but figured it was all about perception. Two people could honestly look at the same event and disagree as to what happened. That's what I learned during jury duty.

Here is a [subscription] case from the NYLJ.  Would the attorney, if permitted to act as a private DA be granted the same insulation from legal malpractice as a real DA?

"Matter of Sedore v. Epstein, 2672/06
Decided: January 23, 2007

DUTCHESS COUNTY
Supreme Court

James W. Hill, Sr. Asst. Public Defendant

Dutchess County Public Defender's Office

Bridge Rahill Steller, Chief Asst. District Attorney

District Attorney's Office of Dutchess County

Justice Brands
Click here to see Judicial Profile

DECISION, ORDER & JUDGEMENT

The petitioner challenges the delegation of prosecution of charges against her of harassment in the second degree by the District Attorney's Office. The District Attorney's Office points to People v. Soddano, 86 NY2d 727 [1995] for its holding that the District Attorney may delegate the prosecution of "petty crimes or offenses" to private attorneys. However, it was a State Trooper who did the prosecuting of a speeding violation of the Vehicle and Traffic Law, not an individual complainant's private attorney's prosecution of a harassment charge.

Petitioner is represented by the Public Defender, James Hill. Petitioner wanted Mr. Hill to represent her in her cross-complaint against the complainant, Jonathan Dallar. However, Mr. Hill is not authorized to do so but only to represent indigent defendants on criminal charges. The petitioner states she cannot afford to retain counsel and has been unable to find counsel to represent her pro bono. At an appearance before respondent, Harold D. Epstein, as Town Justice, the petitioner's cross-complaint was dismissed.

These proceedings all arise following a board meeting held July 18, 2005 at the Locust Grove Condominium Complex in Fishkill, New York. An incident occurred involving the petitioner, Jonathan Dallar, and Heidi Braun, as a result of which the police were called. Petitioner was charged with two counts of harassment in the second degree based on the complaints by Mr. Dallar and Ms. Braun. Mr. Dallar was charged with one count of harassment in the second degree (dismissed as hereinabove referenced) based upon the complaint of the petitioner. According to Mr. Hill's affirmation, the District Attorney's Office advised at an appearance before Justice Epstein that due to the fact that the charges were all non-criminal violations not classified as domestic violence cases, per the policy of the Dutchess County District Attorney's Office, it would not be prosecuted. The District Attorney's Office authorized private counsel to prosecute the complaints on behalf of Mr. Dallar and Ms. Braun. All matters were set for trial on January 11, 2006. The matter could not be resolved, and was adjourned ultimately without date pending the determination of this petition. Petitioner objects to the attorneys, D. James O'Neil, and Adam Kirk, being designated by the Dutchess County District Attorney's Office to prosecute the complaints of Mr. Dallar and Ms. Braun, respectively, on the basis that they are private practitioners involved in the general practice of law, who were retained by the complainant, who are not employees of the Dutchess County District Attorney, and are not duly appointed to represent the people of the State of New York. Petitioner's counsel argues that County Law Section 700 (1) provides that the District Attorney shall conduct prosecutions for all crimes and offenses including harassment in the second degree. County Law Section 701 provides a mechanism for the appointment of a special prosecutor in certain circumstances which the petitioner and her counsel state are inapplicable here. Petitioner's counsel points to People v. Zimmer, 51 NY2d 390 [1980] and the Code of Profession Responsibility, Ethical Cannon 7-13, providing that a District Attorney's primary obligation is to the public and that the defendant as a member of the public, is entitled to a full measure of fairness such that his mission is not so much to convict as it is to achieve a just result. Counsel argues that this is not so of a private attorney retained to prosecute a criminal defendant. It is upon this that petitioner bases her argument that the absence of a "neutral prosecutor" in this case violates her due process rights.

In answer, the District Attorney's Office states it has a long standing policy of not assigning Assistant District Attorneys to prosecute violations of local laws, considered "petty" offenses. In 1963, the New York Court of Appeals found that although County Law Section 700 (1) does not mandate the physical presence at every criminal hearing in the County of the District Attorney or his deputy, it means at least that the District Attorney must carry the responsibility and set up a system whereby he knows of all the criminal prosecutions in his county and either appears in person or by Assistant or consents to appearance on his behalf by other public officers or private attorneys. (Citing People v. Van Sickler, 13 NY2d 61). The petitioner argues that the District Attorney has not carried out this responsibility. Further, in the Van Sickler matter, the complaining witness prosecuted on her own behalf, and in the cases cited in that opinion, it was the Deputy Sheriff, Village Attorney, Town Attorney or Corporate Counsel, that prosecuted. At bar, there is no claim other than that the counsel are being paid by the complainants. If a defendant has no right to choose the prosecutor, why should a complainant? This court finds a great distinction between pro se representation, representation by a District Attorney or other public servant on behalf of the People and prosecution by a lawyer hired by the complainant versus an indigent defendant. That is not justice, but an abuse of the judicial system.

The District Attorney's Office argues that petitioner is seeking prohibition to review a claim that she is about to be improperly tried on violation charges and therefore is raising an issue in a pending criminal case which may not be reviewed in an Article 78 proceeding, and argues that petitioner's remedy if convicted would be to appeal. The District Attorney's Office argues that a private attorney appointed by the District Attorney's Office must abide by the same standards as a public prosecutor. This is impossible, at bar, where those prosecutors have been privately paid and retained by the complainants. Further, although petitioner alleges that her complaint was unfairly dismissed, the District Attorney's Office offers no explanation for this nor as to how such a determination was made which is particularly troublesome given that all three complainants gave information and supporting depositions to the responding police at or about the same time, following the July 18, 2005 incident, and in the same form, and where the basis for such dismissal cannot be ascertained from the papers before this court.

As argued in the reply affirmation of James Hill, Esq., of the Dutchess County Public Defender's Office, the petitioner does not seek mandamus or prohibition against the Dutchess County District Attorney. Counsel argues that allowing this proceeding to go forward would constitute an abuse of authority by the Town of Fishkill which is an issue properly before this court upon review in an Article 78 proceeding. This court agrees.

There is an inherent conflict and ethical dilemma for a privately retained attorney to prosecute on behalf of the District Attorney's Office based upon which this court finds it would be an abuse of discretion and in excess of lawful procedure to allow the prosecution to go forward in such manner. Accordingly, it is hereby

ORDERED that the petition is granted to the extent that the respondent, Hon. Harold D. Epstein, as Town Justice of the Town of Fishkill, Dutchess County, New York, shall not proceed in the Matter of the People v. Sedore if prosecution is not by the District Attorney, or an Assistant District Attorney.

The foregoing constitutes the decision, order and judgment of this court.

Pursuant to CPLR Section 5513, an appeal as of right must be taken within thirty days after service by a party upon the appellant of a copy of the judgment or order appealed from and written notice of its entry, except that when the appellant has served a copy of the judgment or order and written notice of its entry, the appeal must be taken within thirty days thereof. "

In NJ, as in NY, a criminal defendant may not sue his attorney for legal malpractice absent a showing of "innocence", which in NY generally means a vacatur of the conviction or some post-conviction reversal.  Here is another NJ failure.

"Having fully considered these arguments, we affirm the Law Division's order granting defendants summary judgment, substantially for the reasons set forth in Judge Mary C. Jacobson's well-reasoned letter opinion dated August 31, 2004, including, but not limited to the judge's reliance upon Alampi v. Russo, 345 N.J. Super. 360, 368 (App. Div. 2001) (denying recovery in a legal malpractice case arising out of a guilty plea that was not vacated or reversed in the criminal appellate process); see also Heck v. Humphrey, 512 U.S. 477, 486, 114 S. Ct. 2364, 2372, 129 L. Ed.2d 383, 393-94 (1994).

This NC case illustrates the problems with determining when a statute of limitations starts to run.  Is it on the date of  bad advice, the date of the settlement, the date of the release, or later?  The North Carolina Appellate Blog writes:

"COA: Despite Signed Certified Mail Return Receipt, Service Validity Issues
In In the Matter of K.N., the COA yesterday vacated an order terminating a mother's parental rights. Importantly for a party bringing any type of suit, the COA did so despite a certified mail return receipt that had been signed, and seemingly without proof as to improper service.

Civil Procedure Rule 4 allows for a presumption of proper service where process was signed for by the named party's agent or a person who resides in his or her home. Here, the COA found the presumption of proper service rebutted by: 1) the discrepancy between an address the mother gave the trial court and the address to which the certified mail was directed; 2) the mother's failure to appear at the proceeding; and 3) the lack of information about who the person who signed for the certified mail was.

The COA essentially held that the mother's procedural due process rights to notice and a hearing (here the hearing was only 20 mins. and the mother had not been represented by counsel) had been violated. The COA therefore vacated the order terminating the mother's parental rights.

Notably, the Court suggested that "issues" as to valid service may suffice to invalidate an order. The COA did not indicate, for example, that evidence existed demonstrating that the person who had accepted service for the mother was unauthorized to do so. (Carpenter v. Agee suggests that that's the kind of evidence needed to overcome the presumption of proper service resulting from a return receipt and affidavit of service. 171 N.C.App. 98, 613 S.E.2d 735 (2005)). Nor did the COA indicate (or the appellant affirmatively state in her brief) that the address to which the summons had been sent was actually wrong.

Will future defendants for whom someone else signs when process is delivered be able to overturn adverse judgments by providing discrepant addresses, failing to appear, and leaving unanswered whether the person who signed for service was actually unauthorized? Plaintiffs and petitioners may want to think about these risks in determining whether their proof of service is sufficient.

We are scratching our head over this case.  A 10-2 verdict?  Double Dipping?  Defendants who drop out of the story?

"In Baker Botts, et al. v. Kenneth F. Cailloux, as Next Friend of Kathleen C. Cailloux, the 4th Court of Appeals in San Antonio reversed a 2005 trial court judgment ordering Baker Botts and Wells Fargo Bank Texas N.A. to pay $71 million in damages to their former estate-planning client Kathleen C. Cailloux, a wealthy widow in Kerrville.

In an opinion written by Justice Catherine Stone, the three-justice panel reversed the judgment against Baker Botts and Wells Fargo on the ground that nothing in the record proved that Baker Botts or Wells Fargo breached a fiduciary duty that caused Cailloux to disclaim her right to the estate of her late husband, Floyd Cailloux. The appeals court rendered a take-nothing judgment in favor of the firm and the bank.

In 1995, a jury in 198th District Judge Emil Karl Prohl's court in Kerrville had found that Kathleen Cailloux would have received $65.5 million in trust if she had not disclaimed her right to Floyd's estate. However, the jury also found the woman had no lost-income damages or economic-loss damages as a result of executing the disclaimer. Prohl ordered Baker Botts and Wells Fargo, the executor of Floyd's estate, to pay $71 million in damages to fund a trust for Kathleen Cailloux.

However, in its opinion, the 4th Court found Prohl abused his discretion by creating an "equitable trust" to hold the millions of dollars he ordered Baker Botts and Wells Fargo to pay.

"We are further troubled by the "equitable trust' fashioned by the trial court because it essentially places Kathleen in a better position than she previously occupied," Stone wrote in the 11-page opinion, in which Chief Justice Alma Lopez and Justice Karen Angelini joined.

The litigation stems from estate planning Baker Botts did for Cailloux and her husband, a founder of Keystone International. According to a lawyer for Kathleen and for her son Kenneth Cailloux, Austin's Richard Harrison, Kathleen and Floyd were worth about $130 million. Kenneth is his mother's legal guardian, because Kathleen is incapacitated by Alzheimer's disease.

The plaintiffs alleged in the sixth amended petition that the defendants conspired to convince her, right after Floyd Cailloux's death in 1997, to disclaim her rights to her husband's estate and to transfer more than $60 million to the Cailloux Foundation — ostensibly to save more than $30 million in taxes — without informing her of other estate-planning options.

According to the 4th Court's opinion, more than six years after Kathleen disclaimed her husband's estate, her son Kenneth, as her next friend, sued Baker Botts and Wells Fargo for, among other things, breach of fiduciary duty relative to Kathleen's execution of the disclaimer.

The defendants denied all of the allegations.

In February 2005, a jury in Prohl's court, by a 10-2 vote, found Baker Botts breached its fiduciary duty to Kathleen Cailloux by failing to disclose "all important information" when doing estate-planning work for Cailloux following the death of her husband in January 1997. The jury, however, found Baker Botts did not breach its fiduciary duty in three other areas: by failing to act with the utmost loyalty toward Cailloux, by participating in transactions that were not fair and equitable to Cailloux, or by failing to act in the utmost good faith and to exercise the most scrupulous honesty toward the widow.

The jury also found Wells Fargo breached its fiduciary duty to Kathleen Cailloux and found that former bank official William Goertz, who also served on the board of the Floyd A. Cailloux and Kathleen C. Cailloux Foundation, individually participated in that breach. Goertz settled before trial.

The jury assessed 25 percent of the responsibility for the injury to Cailloux, another 25 percent against Baker Botts and 25 percent each against Wells Fargo and Goertz.

For the breaches of fiduciary duty, the jury found Kathleen Cailloux should be compensated with $65.5 million — the value she would have received in trust had she not agreed to disclaim her rights to the money.

Prohl signed a judgment in April 2005 ordering Baker Botts and Wells Fargo to pay $71 million into a new trust, the Kathleen C. Cailloux Equitable Trust. He ruled Kathleen Cailloux can use the interest from the trust and can withdraw up to 5 percent of the principal yearly.

While the jury returned a $65.5 million verdict, Prohl added $5.6 million in prejudgment interest, plus court costs and postjudgment interest.

Baker Botts and Wells Fargo appealed the judgment, claiming, among other things, that there was insufficient evidence to support the jury's findings that their alleged breaches of fiduciary duty proximately caused Kathleen Cailloux damage, and the trial court had no power to create an equitable trust.

Ken Cailloux, Kathleen Cailloux's son, also appealed the judgment, alleging there was insufficient evidence to support the jury's finding that his mother is entitled to nothing for lost income.

The 4th Court panel reversed the trial court's judgment to the extent that it imposes a $65.5 million equitable trust on Baker Botts and Wells Fargo, and rendered a take-nothing judgment in their favor, but it affirmed the trial court's judgment in connection with Kathleen Cailloux's claim for lost income.

Bernstein v. State of New York, 06 Civ. 5681
Decided: February 6, 2007

"Disciplinary proceedings were instituted against Bernstein by the Grievance Committee for the Second and Eleventh Judicial Districts. The petition contained three charges of professional misconduct, including a charge that Bernstein "converted clients [sic] funds that were entrusted to him as a fiduciary, in violation of Code of Professional Responsibility DR 9-102(a) and DR 1-102 (a)(3) and (7) (22 NYCRR 1200.46 [a]; 1200.3 [a] , )." The Appellate Division, Second Department, ordered that the matter be referred to a Special Referee for a hearing and report. Following a hearing, the Special Referee sustained all of the charges. The Grievance Committee then moved to confirm the Special Referee's Report, a motion that Bernstein opposed. In its decision confirming the Special Referee's Report, the Second Department made the following findings:

On or about July 1, 1999, Dr. Alexander Hollander, a dentist, was arrested pursuant to a 36-count criminal indictment charging him with grand larceny in the third degree (two counts), scheme to defraud in the first degree, offering a false instrument for filing in the first degree (27 counts), falsifying business records in the first degree (three counts), and perjury in the first degree (three counts). The respondent [Bernstein] represented Dr. Hollander at his arraignment, and bail was set at $50,000. Also on July 1, 1999, the respondent received $4,400 in cash on behalf of Dr. Hollander for bail. The respondent failed to apply those funds towards Dr. Hollander's bail and failed to return the money to Dr. Hollander or his representative upon demand. Instead, he converted the $4,400 to his own use and benefit.

The Second Department sustained the charge of conversion and ordered that "pursuant to Judiciary Law §90, effective immediately, the respondent, Joshua Bernstein, is disbarred, and his name is stricken from the roll of attorneys."

The Court of Appeals dismissed Bernstein's appeal of his disbarment. Bernstein then made "a combined motion in the Appellate Division for reargument and, in the event of affirmance, for leave to appeal. Same were summarily denied, without Opinion." Bernstein also made "an appeal 'as of right' to the Court of Appeals" which was "dismissed on the basis that no criterium [sic] for an 'as of right' appeal was met."

In his opposition to the motion to confirm the Referee's Report, Bernstein argued that he had a right to a retaining lien on the $4,400 that was to be used for Dr. Hollander's bail "pursuant to an express oral retainer agreement made in open Court between the Plaintiff and said client at the latter's arraignment therein, in the presence of the prosecutor thereon, upon which retainer agreement, with respect to fees to be paid to the Plaintiff, the client defaulted." Bernstein also "brought to the Appellate Division's attention the fact that a provision in the Lawyer's Code of Professional Responsibility explicitly provides that it is NOT a violation thereof for an attorney to act pursuant to a 'recognized lien'." However, the Second Department concluded that "[t]he respondent presented no mitigating circumstances at the hearing," and that "the fact remains that [Bernstein] allowed his client to remain in prison while he converted to his own use money that was supposed to be used for bail."

Bernstein's allegations of due process violations, and his position that the Rooker-Feldman doctrine does not bar this Court's exercise of subject matter jurisdiction, are both based on his conclusion that the New York State court proceedings did not constitute "judicial proceedings" and, as such, could neither legally deprive him of his property by disbarment, nor present an obstacle to this Court's exercise of jurisdiction. "

He tried in Supreme Court, at the Appellate Division level and now in Federal Court.  Attorney is sanctioned losing at all levels.

"Plaintiff is suing the Appellate Division of the Supreme Court, Second Judicial Department ("Appellate Division"); Appellate Division justices Gail Prudenti, David Ritter, Frank Santucci, and Robert Schmidt, in their individual capacities; and, finally, also in his individual capacity, James E. Pelzer, the Clerk of the Appellate Division.

Plaintiff was admitted to practice law before the courts of the State of New York on December 20, 1950, and was subsequently admitted to practice before the United States District Courts of the Southern and Eastern Districts of New York.

This case arises from two court sanctions against Plaintiff which, coupled with several other disciplinary violations, resulted in the suspension of his license to practice law. First, on September 14, 1999, the Westchester County Supreme Court issued a sanction order directing Plaintiff to pay $4,500 by October 1, 1999 to the Lawyers' Fund for Client Protection for the State of New York for violating pretrial discovery orders and engaging in frivolous motion practice. Caiola v. AllCity Ins. Co., Nos. 1333/96, 8095/99, 2002 WL 1448855, *1 (N.Y. Sup. June 10, 2002). Second, on July 10, 2001, the Westchester Supreme Court directed Plaintiff to pay $3,500 by July 30, 2001 to the Client Protection Fund for once more engaging in frivolous motion practice. Id. at *2.

Plaintiff did not comply with these sanctions, and the trial court found him guilty of criminal contempt. Id. at *19-20. This order subsequently was overturned by the Appellate Division because Plaintiff was not personally served with notice of the proceeding. Caiola v. Allcity Ins. Co., 305 A.D. 2d 350, 351, 758 N.Y.S. 2d 683, 685 (App. Div. 2d Dep't 2003). On July 22, 2003, the Westchester Supreme Court judge denied Plaintiff's motion to dismiss the criminal contempt proceeding against him. Caiola v. Allcity Ins. Co., 7 A.D. 3d 557, 557, 776 N.Y.S. 2d 504, 2004 N.Y. Slip Op. 03756 (App. Div. 2d Dep't 2004). The Appellate Division affirmed, holding that his argument that the Westchester Supreme Court "did not have the power to commence the criminal contempt proceeding against him sua sponte" was "without merit." Id. "

Here is a story about a Physician with 110 medical malpractice cases pending against him.  He just lost his third legal malpractice case against his attorneys

"The U.S. District Court in Charleston dismissed two lawsuits on Tuesday that Dr. John A. King, whose name is now Christopher Wallace Martin, filed against lawyers who represented him. The court previously dismissed a third lawsuit King had filed.

Today, King has 110 pending medical malpractice lawsuits filed against him in Putnam County Circuit Court related to surgeries he performed at Putnam General Hospital in Hurricane.

Last fall, King generated two more medical malpractice suits while treating patients at clinics near Birmingham, Ala. King filed all three lawsuits against his former West Virginia lawyers on Feb. 20, 2006, seeking “compensatory damages for legal malpractice.” At the time, King said he was living in Florida.

Each suit alleges the West Virginia lawyers King hired after Putnam General Hospital suspended his privileges on June 5, 2003, did not represent him effectively. "

Here is a decision from Civil Court which is a textbook on how to get a trial de novo after an attorney fee arbitration. 

Pruzan v. Levine, 114263/06
Decided: February 6, 2007

Judge Richard Velasquez

KINGS COUNTY
Civil Court

Petitioner: Pro se

Respondent: Pro se

Judge Velasquez

BACKGROUND

Respondent, Laurence A. Levine, moves this Court to dismiss the instant petition on the basis that the Court lacks jurisdiction to hear this matter. Petitioner's claims arise out of a attorney-client relationship wherein the petitioner, Thomas Pruzan, Esq., was retained by the respondent to represent him in a landlord-tenant proceeding. Respondent paid a retainer of $5,000.00 to petitioner to secure his services. At some point during petitioner's representation, respondent became dissatisfied with petitioner's services, and chose to terminate the relationship. Respondent demanded return of his retainer for petitioner's services, and petitioner refused. Respondent then availed himself of the New York State Fee Dispute Resolution Program (Part 137 of the Office of Court Administration Rules) wherein a dissatisfied client may seek to resolve a fee dispute by arbitration. "Arbitration is mandatory for an attorney if requested by a client, and the arbitration award shall be final and binding unless de novo review is sought as provided in section 137.9." §137.2 of the Office of Court Administration Rules.

Respondent filed a Client Request for Fee Arbitration with the Brooklyn Bar Association on or about February 17, 2006. Arbitration was held at the Brooklyn Bar Association on or about May 30, 2006 before Barbara S. Odwak pursuant to the Office of Court Administration Rules Part 137 entitled Fee Dispute Resolution Program. The amount in dispute was $5,000.00. On June 8, 2006 an Arbitration Award was entered in the "Matter of Fee Dispute Arbitration between Laurence A. Levine, Client and Robert (sic) Pruzan, Esq." wherein Mr. Levine was found to be entitled to a refund by Mr Pruzan of $2500.00. Mr. Pruzan requested that a new Arbitration Award notice be issued as the name of "Robert Pruzan, Esq.", father of petitioner herein, was shown in the caption of the June 8, 2006 Award to be the attorney. Another award notice was issued with the correct attorney's name in the caption on July 13, 2006. In order to ensure compliance with section 137.8 (30 day requirement), however, Mr. Pruzan filed a Demand for a Trial De Novo on July 6, 2006.

Mr. Pruzan alleges that he was unable to determine what procedure governed his request for a Trial De Novo, and how to obtain a trial on the issue of whether he was entitled to keep his retainer from Mr. Levine. After several conversations with Court Clerks in Kings County Civil Court he was advised to bring a petition under CPLR 7511 to set aside the arbitration award and to determine what, if any, refund Mr. Levine was entitled to receive. Following that advice, Mr. Pruzan brought a Notice of Petition and Petition for the above relief, returnable in Part 34 on August 30, 2006. Mr. Levine, the respondent herein, than brought a Motion to Dismiss and for other relief alleging that petitioner had failed to timely commence an action within thirty (30) days, which was finally heard on October 24, 2006.

The Court has gone to considerable lengths to determine what procedure must be followed where a Demand for a Trial De Novo is timely made pursuant to Part 137 Fee Dispute Resolution Program, but where the action is commenced after thirty (30) days have expired, and what kind of action should be commenced. With the assistance of the Executive Director of the Brooklyn Bar Association, the local administrator for the Fee Dispute Resolution Program and the Office of Alternative Dispute Resolution of the Unified Court System, the Court has determined the proper procedure.

DISCUSSION

Section 137.8(a) of the Rules of the Chief Administrator of the Courts (22 NYCRR §137.8(a)) provides under the caption "De Novo Review":

"A party aggrieved by the arbitration award may commence an action on the merits of a fee dispute in a court of competent jurisdiction within 30 days after the arbitration award has been mailed. If no action is commenced within 30 days of the mailing of the arbitraton award, the award shall become final and binding."

The Court notes that commencing de novo review has been the subject of some confusion among attorneys, clients and court staff. Two recent decisions confirm that litigants and court staff alike have sought guidance regarding not only the appropriate pleadings to commence de novo review but also in which court such review should be sought.

In Borgus v. Marianetti, 7 Misc.3d 1003(A), 801 N.Y.S.2d 230, 2005 WL 742300 (N.Y. City Ct., 2005), the Court discussed the difficulties faced by an aggrieved party who sought relief from an award issued during Fee Dispute Resolution Program (FDRP) arbitration. In Borgus, neither party properly commenced an action in the Rochester City Court in accordance with the statutory procedures for commencing actions in City Courts; rather, the attorney filed a document called a "Demand for a Trial De Novo." Despite the fact that neither party had filed a Summons, Complaint, Answer, Note of Issue, or Certificate of Readiness, the Court held that it was not jurisdictionally fatal for the party who was aggrieved by an FDRP arbitration award to initiate de novo judicial review by filing a document labeled, "Demand for a Trial De Novo."

In Mahl v. Rand, 11 Misc.3d 1072(A), 816 N.Y.S.2d 697, 2006 WL 825117 (N.Y.C. Civ. Ct., 2006), the attorney and client proceeded through the fee dispute arbitration program of the local bar association, and the arbitrator awarded the attorney $4,000. The client then attempted to "commence a proceeding for a trial de novo, and each time the client was told politely that the Civil Court had no known procedure for commencing an action with a demand for a trial de novo." Mahl v. Rand, supra. The client was unable to commence de novo review in a court of competent jurisdiction within the 30-day limit set forth in 22 NYCRR §137.8(a), and the attorney sought to confirm the arbitrator's award pursuant to CPLR §7510. The Court concluded that the client had made repeated good-faith attempts to commence de novo review and concluded that "it is appropriate to deem the client's showing to be a cross-petition to vacate the arbitration award and, in light of the established facts, grant such cross petition and order that the legal fees claim of the attorney proceed as a plenary action." Id.

Both Borgus v. Mariannetti and Mahl v. Rand highlight the challenges that some litigants face in exercising their right to de novo review pursuant to 22 NYCRR §137.8(a), and both opinions demonstrate the need for judicial flexibility and creativity when parties seek to comply with deadlines but confusion exists as to proper procedure. Accordingly, this Court seeks to clarify the procedures that should be followed by parties who seek de novo review.

Initially, the following analysis assumes that the parties seek relief through the commencement of a plenary action rather than by motion in any pending litigation in which the attorney represented the client.

A party who is aggrieved by an arbitration award and who seeks to commence de novo review must first determine the remedy sought. In those cases where the aggrieved party seeks a court order stating that he or she does not owe the other party any money (i.e., cases in which a client seeks an order declaring that the client does not have to pay a fee that the attorney claims is due and owing or cases in which an attorney seeks an order declaring that the attorney need not refund money previously paid by the client to the attorney), the aggrieved party must commence an action for declaratory relief, which is available only in Supreme Court pursuant to CPLR §3001.

In those cases where the aggrieved party seeks to recover money (i.e., cases in which an attorney seeks to recover money from a client who has not yet paid a fee or cases in which a client seeks to recover money previously paid to an attorney), the aggrieved party faces a second inquiry: what is the amount sought? The New York City Civil Court has jurisdiction over proceedings for the recovery of money where the amount sought does not exceed $25,000. N.Y.C. Civ. Ct. Act §202.1

In those cases where the amount sought does not exceed $25,000, the aggrieved party may commence an action in the New York City Civil Court. The commencement of such an action must comply with the pleading requirements set forth in Article 9 of the New York City Civil Court Act and 22 NYCRR Part 208 (Uniform Civil Rules for the New York City Civil Court).

In those cases where the amount sought exceeds $25,000, the aggrieved party must commence an action in New York State Supreme Court, and the pleadings must comply with the pleading requirements set forth in Article 30 of the Civil Practice Law and Rules.

In the instant matter, the Court finds that the Petitioner made a good-faith attempt to obtain de novo review within the 30-day window set forth in 22 NYCRR §137.8(a). The Court finds that Mr. Pruzan timely filed a Demand for a Trial De Novo within 30 days of the date when the Brooklyn Bar Association mailed the arbitrator's award to him and, pursuant to advice received from Kings County Civil Court, he filed a petition pursuant to CPLR §7511 within that 30-day window.

However, given that Petitioner essentially seeks a declaration from the Court that he is under no obligation to refund any of his former client's money, the Court concludes that it lacks jurisdiction because the Civil Court cannot issue equitable relief, and an action commenced pursuant to CPLR §7511 cannot provide Petitioner with the relief he seeks.

Accordingly, the Court dismisses Mr. Pruzan's petition with leave to file an action in New York State Supreme Court for declaratory relief.

Petitioner to serve a copy of the Decision/Order on Respondent and the appropriate clerk with notice of entry.

This constitutes the Decision and Order of the Court.

1. The District Courts and the City Courts in cities outside of New York City have jurisdiction over proceedings for the recovery of money where the amount sought does not exceed $15,000 (Uniform Dist. Ct. Act §202 and Uniform City Ct. Act §202), and the Town and Village Courts have jurisdiction over proceedings for the recovery of money where the amount sought does not exceed $3,000 (Uniform Justice Ct. Act §202).

Anthony Lin of the NYLJ writes:

"A Manhattan judge has denied a lawyer's request for additional fees from a $3.75 million medical malpractice settlement, ruling instead that the lawyer had already taken more than he was entitled to.

Norman L. Cousins represented Kevin Veneski in a 1997 suit against Queens-Long Island Medical Group over Mr. Veneski's 1996 stroke, which had left him disabled and unable to work. The matter settled in 2002 for a $3 million lump sum and an annuity yielding $750,000 over the next 20 years.

The retainer agreement provided that Mr. Cousins would receive 30 percent only of the first $250,000 of recovery, with his share shrinking to 10 percent of any amount over $1.25 million.

But Manhattan Supreme Court Justice Sherry Klein Heitler (See Profile) ruled in a Feb. 2 decision that Mr. Cousins had already billed and received attorney's fees of around $948,000, almost one-third of the lump-sum portion of the settlement.

As a result, "the court concludes that Cousins owes Veneski, at a minimum, approximately $513,000 that he has received over and above the statutorily permitted amount," the judge wrote in Veneski v. Queens-Long Island Medical Group, 100011/98. Mr. Cousins had moved for additional fees on the grounds that the expense and length of the litigation had forced him to file for bankruptcy. He claimed he had been forced to resort to predatory lenders to finance the case, accumulating almost $700,000 in interest charges on around $500,000 in principal. 
"

Rattet lawfirm asks court to seal a pleading about it in a bankruptcy case.  It fails.

"The fact that a complaint contains potentially untrue material that could defame a party is not enough to warrant sealing the document, a federal judge has ruled."

Addressing that standard for sealing "scandalous and defamatory" material under 11 U.S.C. §107(b)(2), Southern District Bankruptcy Judge Martin Glenn rejected the sealing request of a law firm that said allegations of fraud made by another party would harm its reputation if aired on the court's electronic case filing system.

Rattet, Pasternak & Gordon-Oliver in Harrison is the law firm that made the sealing motion in In Re Food Management Group, 04-22880.

In re: Food Management Group LLC, 04-22880
Decided: February 13, 2007

Bankruptcy Judge Martin Glenn

U.S. BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

Appearances:

White, Fleischner & Fino, LLP

Attorneys for Rattet, Pasternak & Gordon Oliver, LLP

New York, NY

Gil M. Coogler, Esq.

Of Counsel

Drinker Biddle & Reath LLP

Attorneys for Janice B. Grubin,

Chapter 11 Trustee for Debtors

Chicago, IL

Warren von Credo Baker, Esq.

Of Counsel

Diana G. Adams

Acting United States Trustee

New York, NY

Richard C. Morrissey, Esq.

Of Counsel

Bankruptcy Judge Glenn

Hinshaw reports this Missouri case:

"The Missouri Court of Appeals for the Western District held that no attorney-client relationship was created simply by the fact the client’s stepfather paid the lawyer’s fees for a criminal defense and therefore affirmed dismissal of the legal malpractice action filed pro se by the stepfather."

" Mr. Fox asserted that he had standing because his family relationship had been harmed by Mr. White’s alleged malpractice, and he was entitled to client status since he had paid the bills and did not receive from Mr. White a non-representation letter. The court disagreed for several reasons. First, “the mere payment of fees, without more, is not proof of an agency relationship, much less an attorney-client relationship. The relationship between a lawyer and his client is a delicate and exacting one, highly personal. It involves much more than the payment of fees. “ Mid-Continent Cas. Co. v. Daniel, Clampett, Powell & Cunningham, 196 S.W.3d 595, 598 (Mo.App. S.D. 2006). Second, “[a]n attorney-client relationship exists when a person seeks and receives legal advice and assistance from a lawyer who intends to give legal advice and assistance to the person.” Collins v. Mo. Bar Plan, 157 S.W.3d 726, 736 (Mo.App. W.D. 2005). 2007 WL 148648 at *2. "

Finally, and even though it would have been better for Mr. White to have sent a non-representation letter, it was not necessary in these circumstances since there was no basis on which to conclude that an attorney-client relationship did in fact exist between Mr. Fox and Mr. White. Cf. Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice Section 2.12 (2005), cited in this opinion. At the end of the day, however, there simply was no specific undertaking by Mr. White on behalf of Mr. Burns’ family members.

Here is a well written and interesting case from the Court of Appeals of indiana called Queery & Harrow Ltd v. TIC  which discusses whether an excess insurer may sue its defense attorney after a settlement which required payment by the excess insurer.  The case covers a wide range of decisions in the area, both from Indiana and elsewhere, and has a strong discussion of the elements of legal malpractice.

Here is a case in which a $ 2 Million dollar medical malpractice verdict is reversed, partially dismissed and sent back for a new trial based upon late CPLR 3101 notice.  Practitioners should beware of this particular problem.  Notice must be sent within a reasonable time after retention.

"The judgment in favor of the plaintiff was, in part, based upon the jury's finding that Rosmarin deviated from good and accepted medical practice by not timely shocking the plaintiff three times in succession after the plaintiff developed ventricular fibrillation. The Supreme Court, however, should not have permitted the plaintiff's expert witness, Rebecca Twersky, to testify at trial as to this and other issues. Twersky was retained on behalf of the plaintiff some time between 1994 and 2002. The trial commenced on November 17, 2002, and Twersky's identification as an expert witness was not disclosed until December 2, 2002, two weeks after jury selection had commenced. Expert disclosure is of particular importance in medical malpractice actions given their heightened reliance on expert testimony (see Meyer v Zeichner, 263 AD2d 597; Tleige v Troy Pediatrics, 237 AD2d 772, 774). While CPLR 3101(d)(1) vests courts with discretion to allow experts to testify "for good cause shown," here, the Supreme Court improvidently exercised its discretion in admitting the testimony, as the plaintiff failed to establish "good cause" for failing to exchange a proper disclosure as to Twersky within a reasonable time after she had been retained. Accordingly, Rosmarin is entitled to a new trial on the plaintiff's claim against her alleging professional negligence in failing to timely administer electric shocks. "

Now a judge, then an associate.  A twisted asbestos litigation story from Texas.  "Associate "Deliberately Lied" to Clients, Jury Finds, Awards $129,000 in Damages "

"In a surprising verdict, a jury in a Dallas federal court found that a former associate with Baron & Budd "deliberately lied" to three clients, awarding them $129,000 in damages on Feb. 8.

The case was unusual because the three plaintiffs in Jacobs, et al. v William K. Tapscott Jr., et al. still are current Baron & Budd asbestos clients. Former associate Ken Tapscott recently left Baron & Budd after he was elected judge of Dallas County Court-at-Law No. 4.

As U.S. District Judge Sidney Fitzwater read the jury's verdict in the case on Thursday evening, Tapscott laughed incredulously and shook his head. The jury found that Tapscott breached his fiduciary duty when he lied to his clients by telling them that all of the asbestos defendants they sued in 1997 had agreed to settle their case when in fact one defendant had not settled. "

Here is a Resources for attorneys Blog entry on Metadata.  Need to know about it?  They say that not knowing leads to malpractice:

"In today's computer dependant world, the zealous advocate must be able to navigate his way through every conceivable form of discovery in order to effectively represent his or her client. Failure to seek the appropriate records or the failure to respond to discovery requests with the appropriate electronic discovery knowledge could potentially expose both client and attorney to the risk of sanctions for discovery abuses and/or result in the spoliation of evidence. Knowledge of the electronic evidence is crucial to any attorney hoping to retain clients. Once electronic evidence is in hand though, an attorney faces additional obstacles, specifically, regarding how to properly use such evidence. Gaining a true understanding of metadata can mean the difference between success and failure"

Hinshaw reports:  "Missouri Appellate Court Holds Third Party Payment of Lawyer’s Fees Alone Does Not Give Rise to Attorney-Client Relationship "

"The Missouri Court of Appeals for the Western District held that no attorney-client relationship was created simply by the fact the client’s stepfather paid the lawyer’s fees for a criminal defense and therefore affirmed dismissal of the legal malpractice action filed pro se by the stepfather"

Hinshaw reports:  "Missouri Appellate Court Holds Third Party Payment of Lawyer’s Fees Alone Does Not Give Rise to Attorney-Client Relationship "

"The Missouri Court of Appeals for the Western District held that no attorney-client relationship was created simply by the fact the client’s stepfather paid the lawyer’s fees for a criminal defense and therefore affirmed dismissal of the legal malpractice action filed pro se by the stepfather"

This is a further report on a case we discussed this summer:

"$10,800,000 VERDICT AND RECOVERY - PROFESSIONAL NEGLIGENCE - LEGAL MALPRACTICE - BREACH OF DUTY OF LOYALTY OWED BY LAW FIRM TO CLIENTS PARTICIPATING IN NEGOTIATION OF SETTLEMENT AGREEMENT - DEFENDANT ALLEGEDLY CEASED REPRESENTING PLAINTIFFS IN CLASS ACTION LAWSUITS RESULTING IN BREAKDOWN OF MULTI-MILLION DOLLAR SETTLEMENT AGREEMENT BETWEEN PLAINTIFFS AND WELL-KNOWN WATER BOTTLING COMPANY.

County
U.S. District Court, District of Maine

In this legal malpractice matter, the plaintiffs, a group of small spring water bottlers, were represented by the defendant law firm in their claims against Nestle' doing business as Poland Springs. The plaintiffs alleged that the underlying defendant Nestle' was not using spring water, but rather, was using well water, consequently mislabeling its product. The defendant law firm was in the process of finalizing a multi-million dollar settlement negotiation when it chose to file class actions on behalf of other similarly situated clients in five states. This second-class action litigation caused Nestle to withdraw consent to the settlement with the initial plaintiffs. The plaintiffs brought suit alleging that the defendant law firm breached its duty of loyalty to the plaintiffs by representing other similar clients and filing suit on behalf of those clients' on the eve of settling for the plaintiffs.

The evidence revealed that in May 2002, the plaintiffs, independent spring water bottlers approached the defendant law firm and another attorney with claims that the bottling company, Poland Spring, owned by Nestle' was using well water instead of spring water and was mislabeling its products for the general public. After investigating the plaintiff's allegations, the defendant law firm and the other attorney entered into a Representation Agreement with the plaintiffs. The plaintiffs agreed, at the defendant's suggestion, that their claims should be resolved through mediation. Nestle' had no desire for publicity regarding the case and there was a mediation agreement in place that prevented either party from filing suit or going public with their respective positions until five days after the mediation had ended.

The parties engaged in several mediations sessions commencing February 28, 2003. Following a mediation session on June 10, 2003, the other attorney representing the plaintiffs was able to negotiate the essential terms of a settlement agreement between the plaintiffs and Nestle. The plaintiffs gave the other attorney full authority to enter into a settlement agreement on their behalf. Nestle' agreed to the settlement proposed. The plaintiffs, Glenwood and Carrabassett were each to receive a ten- year contract to supply Nestle' with up to 65 million gallons of spring water in exchange for payments to each company of $450,000 annually. Nestle agreed to make a charitable donation of $500,000 per year for five years and supply home and office customers with $2,500,000 worth of free Poland Spring Water. The plaintiffs' goal of resourcing Poland Spring Water was accomplished to the satisfaction of the plaintiffs under this ten-year plan. It was agreed that final judicial approval of the class action settlement was not required as a condition to settlement of the competitors' claims. Rather, it was agreed that Nestle' and representatives of the class would have 90 days in which to make a good faith effort toward achieving judicial approval of the class action settlement.

On June 18, 2003, the defendant law firm solicited new clients and filed multiple Poland Spring-related class actions against Nestle' with a great deal of publicity in direct contradiction to the plaintiffs' and Nestle's agreement to keep the matter confidential. The plaintiffs alleged that these subsequently filed suits and the publicity generated by them were as a direct result of the information provided confidentially to the defendant law firm by the plaintiffs. As a result of the institution of the multiple suits against it in multiple states, Nestle' refused to honor its settlement agreement with the plaintiffs.

The plaintiffs brought suit against the defendant law firm maintaining that it breached its fiduciary duty to the plaintiffs as clients and used confidential information provided by the plaintiffs in initiating its subsequent class action suits against Nestle.

The defendant denied the allegations of leg malpractice.

At the conclusion of the trial, the jury found in favor of the plaintiffs and against the defendant. The jury awarded the sum of $10,800,000 in damages allocating the damages as follows: $3,900,000 to Glenwood Farms and $3,900,000 to Carrabassett Spring, and $3,000,000 to the third plaintiff, Tears of the Clouds."

Try to make sense of this case.  It involves legal malpractice and the representations of Chinese hair importers.  See below for a discussion of the "discovery statute of limitations" which is very, very rarely invoked successfully.

"On January 9, 2006, pro se plaintiff, Chuanyu Xie ("Xie" or "Plaintiff"), filed a legal malpractice complaint against his former lawyer Chris Lin (a/k/a Xiaoyun Lin), the law firm of Chen, Lin, Li, & Jiang, LLP, the law office of Lin and Li, and the law office of De Hong (collectively "Defendants"). Upon Plaintiff's request, the complaint was dismissed with prejudice against the law office of De Hong. The remaining Defendants now move to dismiss the complaint against them pursuant to Federal Rules of Civil Procedure 12(b) (1), (2), and (6) - lack of subject matter and personal jurisdiction, failure to state a claim, as well as expiration of the statute of limitations. In the alternative, the law offices of Lin & Li request that all allegations in the complaint related to them be stricken pursuant to Federal Rule of Civil Procedure 12(e), motion for a more definite statement. For the reasons set forth below, the 12(b) motion is GRANTED and thus, I need not reach the 12(e) motion. "

"Defendants also argue that Plaintiff's legal malpractice claim is time-barred. I agree.

The legal malpractice cause of action must be brought within three years of the alleged malpractice, irrespective of whether the claim is based in contract or tort. N.Y. C.P.L.R. §214(6). Here the claim that gave rise to the cause of action for legal malpractice arose on November 6, 2001 when Judge Cote issued her opinion and held Xie personally liable for the damages. Xie filed his legal malpractice action on January 9, 2006, almost six years later. Nothing in the papers suggests otherwise.

Plaintiff contends however, that he did not discover the malpractice, specifically the alleged collusion between his lawyer, Chris Lin, and his adversary until three years after the conclusion of the case. Even if true, it does not salvage the Plaintiff's case.[2] It is well-established that a cause of action for legal malpractice accrues on the date of the allegedly improper action, not on the date the malpractice was discovered.[3] Rafter v. Liddle, 2006 WL 2255093, *7 (S.D.N.Y. 2006); see also Wells Fargo Home Mortg., Inc. v. Zeichner, Ellman & Krause, LLP, 771 N.Y.S.2d 892, 893 (N.Y. App. Div. 2004).

Although Xie's opposition motion (and to a lesser extent, his complaint) is littered with allegations of fraud, these allegations arise out of the same conduct that forms the basis of Xie's legal malpractice claim. Under New York law, the fraud claim in these circumstances is considered duplicative of the malpractice claim, and thus, must be dismissed. See, e.g., id. at 9; see also Laruccia v. Forchelli, Curto, Schwartz, Mineo, Carlino & Cohn, LLP, 744 N.Y.S.2d 335, 335 (N.Y. App. Div. 2002). As a result, the six year statute of limitations associated with a fraud cause of action is not applicable here. "

Defendant attorneys working for a bankrupt insurer are still responsible for EBT transcript bill.  Here is a blurb from NYLJ subscription article:

"CLAIMANT REPORTING company sued in this small claims action against defendant law firm alleging defendants failed to pay for reporting services at a deposition. Defendants argued they were appearing on behalf of an insurer to defend one of its clients, but the insurer filed for bankruptcy and defendants would not be reimbursed if they paid claimant. Defendants argued an attorney was not required to pay fees incurred on behalf of a client as the attorney was only an agent. Claimant asserted General Business Law 399-cc was applicable. The court found the statute's intent to make the attorney responsible for the stenographic costs was not changed by the amendment of 2006. It ruled claimant established that defendant agreed to participate in the deposition, and at no time did it indicate it would not be liable for the cost as required by the statute, nor were its services provided for a not-for-profit, as designated under the statute. The court concluded defendant was responsible for the stenography bill, and must collect from its client, awarding judgment to claimant. "

Here is a short review of an attorney fee dispute which involves Surrogate's Court,  Federal District Court and a claim of unethical contingent fees. 

"Simmons, Jannace & Stagg held sway over federal court recently when it decided that any attorneys’ fees disputes that involve the September 11th Victims Compensation Fund should be litigated in the state courts"

The entire blog.

Cassandra Crotty, a legal malpractice blogger reports this case from Illinois:

"Yesterday's Chicago Daily Law Bulletin reported on an Illinois Appellate Court decision this week that found a fee-splitting agreement between two law firms involving a federal conspiracy lawsuit did not apply to a related legal malpractice case handled by only one of the firms. In affirming the circuit judge's decision, the appeals court found as a matter of law the legal-malpractice case was a separate action not originally included in the fee-sharing aggrement. Justice Robert E. Gordon wrote, "Attorneys should act reasonably towards each other...While this court takes note of plaintiffs' arguments founded in equity that defendants should have paid plaintiffs a portion of the fee, we cannot find a legal basis on which to require defendants to do so." See, Paul B. Episcope Ltd., et al., etc. v. Law Offices of Campbell and DiVincenzo, et al., etc. (I will link to the decision when it is posted on the IL Courts Website) "

This is a law.com subscription site, but the jist is:

"Texas' 1st Court of Appeals has breathed new life into a quarter-century old legal battle that began when one Houston lawyer agreed to represent a woman seeking to collect on loans she made to another Houston lawyer. Although Carol Whitsett died in 2002, her $6.5 million legal malpractice suit against her former attorney, William E. Junell Jr., and Junell's former firm, Andrews Kurth, lives on, with the state appeals court ruling that the statute of limitations does not block the continued litigation.

The law.com subscription site.

Here is the St. Mary's link for the legal malpractice symposium in San Antonio Friday - February 23, 2007.

Here is a fuller story on the legal malpractice bridge.

Toronto-based law firm Gowling Lafleur Henderson is being sued by Ambassador Bridge owner and trucking mogul Manuel "Matty" Moroun in U.S. District Court.
According to the Detroit News, bridge execs say the Canadian law firm has jeopardized the Ambassador Bridge's plan to build a second six-lane span across the Detroit River because one of the firm's partners is also representing the bridge's opponents to the plan in Windsor, Ont.

Ambassador execs say a law firm hired to secure funding
for a twin span was also batting for the other side
The law partner named in the suit, environmental expert David Estrin, has asked U.S. District Judge Nancy Edmunds to dismiss the suit.

Law.Com reports this case Acosta v. PACE Local I-300 Health Fund, 04-CV-3885

"A New Jersey federal judge's dismissal of legal malpractice and breach-of-fiduciary-duty claims against counsel in an ERISA case shows that trustees sued for misfeasance can't easily pass the buck to their lawyers.

Though he dismissed the claims on procedural grounds, U.S. District Judge Joel Pisano held that even if attorney Gary Carlson knew of prohibited transactions and failed to disclose them, the fund's trustees "cannot show that Carlson's conduct -- rather than that of the actual wrongdoers -- was the proximate cause of any losses they allegedly suffered."

Carlson was counsel to the PACE Local I-300 Union and its health fund. The ERISA suit, Acosta v. PACE Local I-300 Health Fund, 04-CV-3885, alleged that the trustees and administrators of the fund drained it of money, paying themselves excessive salaries, leasing fancy cars, using funds for the benefit of the union and other improper purposes. The plaintiffs are hundreds of workers whose health claims went unpaid, the companies they worked for, and health care providers seeking to recover unpaid medical bills.

The trustees, Matthew DiMinno and Allan Funk, turned around and sued Carlson, alleging he was aware of the improper expenditures and had a duty to inform the trustees but failed to do so, resulting in a loss of more than $1 million.

The third-party complaint alleged the failure to act was a breach of fiduciary duty and of legal ethics rules and constituted malpractice by Carlson, his current firm, Kroll Heineman Giblin, and the firm he left in 2004, Lynch Martin.

Here is a case in which a divorce attorney was permitted it attach a lien to the equitable distribution.  Generally, a new "fund" must be created by the attorney's work [as in a personal injury case with a settlement], but here, the attorney got to attach property which was already the wife's.

From the NYLJ  Zelman v. Zelman, New York County:

"PLAINTIFF WIFE'S former attorney in an underlying matrimonial action moved to enforce a charging lien which he filed pursuant to Judiciary Law §475, upon plaintiff's distributive award of equitable distribution. Plaintiff argued the attorney's efforts on her behalf did not create any new funds in the form of equitable distribution to which a charging lien could attach. She alleged the settlement awarded her equitable distribution equal only to the value of real property she already had legal title to. The attorney calculated that the $1.6 million settlement, awarded to plaintiff, exceeded her share of the actual real estate proceeds by at least $300,000. The court found such calculation reasonable, stating the excess amount represented the creation of a new fund by the attorney's efforts to which a charging lien may attach. Thus, it granted the motion to enforce a charging lien in the amount of nearly $170,000, referring the matter to a special referee for a hearing to determine the amount of legal fees dues. "

Here is a story which about a legal malpracice suit in Detroit.  Plaintiffs say that one law firm argued in Canada to build a bridge, and in the US to stop the bridge.  The article.

"A two-timing law firm has jeopardized the Ambassador Bridge owner's $500 million plan to build a second span between Detroit and Windsor, according to federal court records.

Companies owned by bridge mogul Manuel "Matty" Moroun have sued Toronto firm Gowling Lafleur Henderson in U.S. District Court, claiming it represented them while a partner fought the bridge plan on behalf of Windsor officials.

"A lot of firms work for the city, but when you take out a sword and try to hurt me, it's a problem," said Dan Stamper, president of the Detroit International Bridge Co., which owns and operates the Ambassador Bridge. "We see that as a huge conflict and it ought to stop."

The law partner named in the suit, environmental expert David Estrin, has asked U.S. District Judge Nancy Edmunds to dismiss the suit; a response from Moroun's lawyers is due Feb. 23. "

The lawsuit chronicles an international battle between one of the nation's largest private companies and one of Canada's largest law firms and comes amid a U.S. Coast Guard review of Moroun's plan to add a second span at least six lanes wide on the west side of the Ambassador Bridge.

Will there be an estate of Anna Nicole Smith Legal Malpractice Case.  This particular commentator thinks so. Johanna Grossman of Findlaw thinks so in this article. 

"There were at least two pending lawsuits against her at the time of her death, which will likely now be waged against her estate. Anna Nicole had spent recent months as a spokesperson for TrimSpa, a diet products company. She and TrimSpa are named in a class action lawsuit filed last week, which alleges that they made false or misleading claims about the product's ability to cause weight reduction. This lawsuit has the potential to deplete Anna Nicole's estate. Perhaps a loss here could be countered by a victory in yet another lawsuit: a legal malpractice suit brought by Anna Nicole against one of the law firms that has represented her in some of her legal battles. "

Nextel workes bring legal malpractice action against Leeds Morelli & Brown. 

"A group of former Nextel employees from New Jersey alleges that their former lawyers struck a sweetheart deal with the wireless communications giant to cap a settlement of their discrimination claims.

The five plaintiffs -- all former employees at Nextel's Rutherford office -- are suing both the law firm and the company individually and as representatives of a larger class of at least 500 people. "

"Representatives of Nextel Communications Inc. and the Long Island law firm Leeds, Morelli & Brown deny any impropriety. In legal papers, they argue that all of the plaintiffs signed off on the settlement and can't revoke their consent now.

"The plaintiffs either lied when they made those statements, or are lying now when they allege they were ignorant of the terms," wrote Nextel attorney Lawrence R. Sandak.

Plaintiffs: 500 former Nextel employees

Defendants: Nextel Communications Inc.; Leeds, Morelli & Brown

The complaint: The former employees claim Nextel paid Leeds, Morelli $7.5 million to cap a potential $2 billion settlement of their discrimination claims at $4.5 million. 

After failing to persuade a federal judge to seal the proceedings, Nextel and the law firm have requested the case be dismissed.

The article

One rarely finds an article about the business side of law firms, and almost never about legal malpractice.  We reported this bankruptcy and legal malpractice problem for Coudert Brothers a while back.  Today Ellen Rosen of  the New York Times reports:

"At one time, the breakup of a big, prestigious law firm was rare. But since the technology boom and bust, implosions of once highflying firms like Brobeck, Phleger & Harrison and Testa, Hurwitz & Thibeault have occurred with more frequency. 

Creditors and at least one former partner have filed lawsuits against Coudert Brothers.
Yet the bankruptcy of Coudert Brothers still stands out. Eighteen months after the firm voted to dissolve, its unwinding continues to be a complicated, messy affair.

Creditors and at least one former partner have filed lawsuits against the firm. Malpractice claims have accrued as well. There are allegations in court filings that three overseas lawyers sequestered money from the firm as it tried to pay off its creditors.

And the committee for unsecured creditors contends that payments to partners were done improperly at a time when the firm should have known it was insolvent, an assertion that lawyers for Coudert deny. Although it is difficult to determine just how much is at stake, the lawyer for the creditors’ committee, David Adler of the New York office of McCarter & English, said the amount could exceed $25 million.

Coudert, experts say, may be an example of what happens when lawyers do not run their firm on sound business principles.

This case from Kings county is puzzling because the court found it was permitted to treat a 3211[a][7] motion as a 3212 Motion for Summary Judgment, without notice to the parties, based upon  use of extrinsic materials.  Read the decision:

"Defendants, Lindenbaum & Young and Alan Young, Esq. (the Young defendants), in this legal malpractice action, move, pursuant to CPLR Rule 3211 (a) (7), for dismissal of the cross-claim against them by defendants, Pollack & Associates, PLLC and Ira B. Pollack, Esq. (the Pollack defendants). The instant case and the earlier cases that led to this case have meandered through the courts and Part 27. My March 27, 2006 decision and order, Richardson v. Lindenbaum & Young, 11 Misc 3d 1070 (A), 2006 NY Slip Op 50453 (U), granted the Young defendants, pursuant to CPLR Rule 3211 (a) (7), dismissal from the action due to plaintiffs' failure to state a cause of action against them. I observed, at 2, in paraphrasing Paul McCartney, that "the instant action is part of a 'long and winding road' of litigation." However, the legal "road" traveled in this litigation has yet to reach its final destination. Last week, in Richardson v. Lindenbaum & Young, 2007 NY Slip Op 50130 (U), I denied plaintiffs' motion and the cross-motions of the Pollack defendants and plaintiffs, pursuant to CPLR Rule 2221, for leave to renew and reargue the March 27, 2006 decision and order. I held, at 1, that:

t]his Court did not overlook or misapprehend matters of fact in making its March 26, 2006 decision and order. Plaintiffs and the Pollack defendants failed to introduce new facts not offered in the prior determination or demonstrate that there has been a change in the law. Further, this Court did not have to give notice that it intended to treat the Young defendants' prior motion for dismissal as a summary judgment motion, because the parties deliberately charted a summary judgment course, by laying bare their proof in submitting extensive extrinsic documentary evidence and affidavits, which set forth the convoluted chronology that led to this action.

The underlying actions which led to the instant legal malpractice case involved an alleged fraudulent conveyance of real property and collection on a judgment. The Pollack defendants were relieved as counsel for plaintiffs and replaced by the Young defendants. Subsequently, the now retired Justice Lewis Douglass, in a September 19, 2002 order, held plaintiffs in contempt for their wilful failure to comply with a subpoena duces tecum and deposition in connection with a judgment entered on December 12, 2001 for $727,847.27 [my March 27, 2006 decision and order, p. 2]. Thereafter, Justice Douglass refused to vacate the default and contempt of plaintiffs in the instant action. He found "no excusable grounds for default nor do I find [a] meritorious defense [my March 27, 2006 decision and order, p. 3]." In my March 27, 2006 decision, at 3, I held that:

[P]laintiffs have failed to allege that the Young defendants were the proximate cause of their loss, that they sustained actual damages, and "but for" the malpractice of the Young defendants, plaintiffs would not have sustained some actual and ascertainable damages. Further, subsequent to the substitution of the Pollack defendants as new counsel there was ample opportunity to vacate plaintiffs' default and present a meritorious defense, if plaintiffs had one. When Justice Douglass issued his September 19, 2002 and January 9, 2003 orders, plaintiffs were then represented by the Pollack defendants, not the Young defendants.

To establish legal malpractice, as instructed in Iannarone v. Gramer, 256 AD2d 443, 444 (2d Dept 1998), a plaintiff must establish, "(1) that the defendant attorney failed to exercise that degree of care, skill, and diligence commonly possessed by a member of the legal community, (2) proximate cause, (3) damages, and (4) that the plaintiff would have been successful in the underlying action had the attorney exercised due care." See Tortura v. Sullivan Papain Block McGrath & Cannavo, P.C., 21 AD3d 1082, 1083 (2d Dept 2005); Volpe v. Canfield, 237 AD2d 282 (2d Dept 1997). In the underlying decision, at 4, I found that plaintiffs failed to allege that they would have prevailed but for the malpractice of the Young defendants. I held, at 4 - 5, that:

plaintiffs' theory of liability is based upon Justice Douglass' September 19, 2002 and January 9, 2003 orders for contempt and refusal to vacate plaintiffs' default, finding that plaintiffs lacked an excusable default or a meritorious defense. Plaintiffs' claims were viable when the Pollack defendants became plaintiffs' counsel on August 7, 2002. According to plaintiffs' complaint, it was the failure of the Pollack defendants to comply with various Court instructions to submit proof of a meritorious defense that caused Justice Douglass to deny the motion to vacate the default judgment. Justice Douglass, in his January 9, 2003 Order, discussed Mr. Pollack's "continuing pattern of default followed by motion to vacate, followed by default," and "how this litigation is regularly delayed." In cases where a successor counsel had sufficient time to protect a party's rights, as in the instant case, the outgoing counsel could not be liable for malpractice. Any alleged negligence by an outgoing attorney cannot be the proximate cause of any of plaintiffs' alleged damages. Kozmel v. Law Firm of Allen L.Rothenberg, 241 AD2d 484 (2d Dept 1997); Golden v. Cascione, Chechanover & Purcigliotti, 286 AD2d 281 (2d Dept 2001); Albin v. Pearson, 289 AD2d 272 (2d Dept 2001); Perks v. Lauto & Garabedian, 306 AD2d 261 (2d Dept 2003); Ramcharan v Pariser, 20 AD3d 556 (2d Dept 2005).

In viewing plaintiffs' evidence in opposition to summary judgment and dismissal, I found that plaintiffs failed to demonstrate the existence of any triable issues of fact. Therefore, I granted the motion of the Young defendants, pursuant to CPLR 3211 (a) (7), to dismiss plaintiffs' verified complaint against them, for failure to state a cause of action.

However, this Court's March 27, 2006 decision and order was silent as to the status of the cross-claim brought by the Pollack defendants for contribution and/or indemnification [exhibit B of affirmation in opposition - verified answer with cross-claim of the Young defendants]. The Young defendants, to put this issue to rest, argue that the Pollack defendants' cross-claim against them is baseless because it is derived from the plaintiffs' dismissed complaint for legal malpractice against the Young defendants. In opposition, the Pollack defendants assert that their cross-claim is an independent pleading. It is not dependent upon the survival of plaintiffs' complaint. The Pollack argument is correct as far as it goes. However, in the instant case, the Pollack defendants' cross-claim against the Young defendants is impossible to separate from plaintiffs' claims in the complaint. Therefore, it follows logically, that upon the dismissal of the complaint against the Young defendants the cross-claim of the Pollack defendants, derived from plaintiffs' complaint, is dismissed.

Discussion

CPLR §3019 (b) states:

A cross-claim may be any cause of action in favor of one or more defendants or a person whom a defendant represents against one or more defendants, a person whom a defendant represents or a defendant and other persons alleged to be liable. A cross-claim may include a claim that the party against whom it is asserted is or may be liable to the cross-claimant for all or part of a claim asserted in the action against the cross-claimant.

While a cross-claim "may be any cause of action in favor of one or more defendants" [Emphasis added], it is clear that the Pollack defendants' cross-claim is derived from and related to plaintiffs' claims against both the Young defendants and the Pollack defendants. It cannot survive the dismissal of the complaint against the Young defendants. The cross-claim [exhibit B of affirmation in opposition] states:

[t]hat if it is determined that the answering defendants are liable to any degree to the plaintiff [sic], whether because of negligence, by operation of law or any other reason, the answering defendants are entitled to have the liability apportioned among and between the co- defendants by way of contribution and/or is entitled to be indemnified by said co-defendants.

In this case the cross-claim arises directly and solely from plaintiffs' claims. The Young defendants successfully demonstrated that plaintiffs failed to properly plead the necessary elements for legal malpractice against them. In my March 27, 2006 decision and order, at 3, I concluded that "plaintiffs have failed to allege that the Young defendants were the proximate cause of their loss, that they sustained actual damages, and 'but for' the malpractice of the Young defendants, plaintiffs would not have sustained some actual and ascertainable damages." Given these findings, and the undisputed fact that no judgments were entered against plaintiffs until well after the Young defendants were relieved as counsel, the Young defendants have no liability in the instant action as to the Pollack defendants.

The Pollack defendants rely upon Brooks v. Chemical Leamon Tank Lines, Inc., 71 AD2d 405 [1st Dept 1979] for the proposition that a cross-claim is not required to be dependent upon the claim of a plaintiff. While this is true, in the case at bar the Pollack defendants' cross-claim is dependent upon plaintiffs' claims. The Pollack cross-claim does not arise out of a separate transaction with the Young defendants, apart from plaintiffs' malpractice claims. As a result, the Pollack defendants' cross-claim for contribution and/or indemnification is no longer viable and must be dismissed.

Further, the Pollack defendants' reliance on La France Carpets, Inc. v. U. S. Rubber Co., 19 AD2d 812 [1st Dept 1963] is similarly misplaced. While the La France Carpets Court correctly states that CPLR §3019 (b) "allows a cross claim for any cause of action and does not require it to be dependent on the claim of the plaintiff," this is not the situation before the Court. Plaintiffs' claims and those of the Pollack defendants are inextricably intertwined. Therefore, the Pollack defendant's cross-claim is subsumed within the plaintiffs' complaint. Thus, the dismissal of plaintiffs' claims against the Young defendants renders the cross-claim of the Pollack defendants against the Young defendants meritless.

Conclusion

Accordingly, it is

ORDERED that the motion by defendants Lindenbaum & Young and Alan Young, Esq., pursuant to CPLR Rule 3211 (a) (7), for dismissal of the cross-claim against them by defendants Pollack & Associates, PLLC and Ira B. Pollack, Esq., because of the failure of defendants Pollack & Associates, PLLC and Ira B. Pollack, Esq. to state a cause of action against them, is granted. "

This constitutes the Decision and Order of the Court

We cover attorney fee disputes in and out of legal malpractice.  This outcome [temporary] is quite unusual.  Jail is rarely a contemplated outcome in an attorney fee dispute.  The details.

"A murder defendant's attorneys wrangling over fee cuts from the agency that governs public defenders has led them to be held in contempt, ordered to spend 24 hours in jail and pay a $500 fine.

Gwinnett County Superior Court Judge William M. Ray levied the punishment Tuesday when the lawyers for accused murderer Donald Steve Sanders refused to proceed with motions because of an alleged conflict of interest with the Georgia Public Defender Standards Council and its Capital Defender Office. Ray freed lawyer Walt Britt and co-counsel Douglas A. Ramseur, a Capital Defender staff attorney, on recognizance bonds.

Here is a PLI web seminar on how to pick the right legal malpractice insurance.  The Seminar is a year or so old, but the faculty is stellar. Take a look.

Divorce and legal malpractice often intertwine.  Issues that regularly come up are insufficient discovery of the husband's business or accounts, failure to ensure correct tax treatment of the marital estate. inequitable distribution based upon ill-considered stipulations, and faiures to present experts.  One site writing about divorce and litigation is Daniel Clement's  New York Divorce Report, which today writes about a divorce/legal malpractice issue.

This field never sees publicity or bikini photos.  Right now, there is a confluence of presidential politics, scandal, presidential gambling sites, bikini photos, Hillary Clinton and legal malpractice.  Here is a second day of gossip.

"Call it a well orchestrated smear campaign or a case with its own merit, we'll call it an important political betting strategy. Hillary Clinton currently sits as the favorite to be elected next US President in 2008. With even odds at Sportsbook.com (see website here), she'd probably be a bigger favorite if not for the fact that there is stiff competition breathing down her throat (specifically, Barrack Obama and a few dark horses that could gain steam down the road.

But those opposed to Clinton cite a possible wrench thrown in her campaign hopes.

"There is an unprecedented situation of a Presidential candidate's campaign being placed in the hands of a three judge panel reviewing evidence of ******* conduct," claim those opposed to Clinton's Presidential run.

The opposition is strong and - regardless of what transpires - could dramatically affect odds of Mrs. Clinton becoming the next US President.

Peter Paul - who in 2000, became central to a campaign fund-raising scandal involving Senator Hillary Clinton - has filed suit against his former legal counsel Judicial Watch, and its current president Tom Fitton, and directors Paul Orfanedes and Chris Farrell, over fundraising abuses, legal malpractice, and professional ethics, false advertising, as well as copyright infringement.

Legal Malpractice is family to its cousin, Medical Malpractice.  In either situation, a person has put faith in a professional, asking that a threatening problem be solved.  It matters little to the client/patient whether the situation is an operation or a trial.  in either, the problem is overwhelming and threatening.  What happens when something goes wrong.

There are financial considerations, but equally as important is the anger which comes from believing that you've been let down.  Here, at the crux, is where an apology might help.  Dr. Emily Senay, of CBS reports on medical malpractice.  It is equally applicable to legal malpractice:

"It's not greed that drives most people to file medical malpractice lawsuits," Wojcieszak said. "It's anger. They get — people get angry when they think there's a cover-up."

Wojcieszak's anger turned into action. He created the Sorry Works Coalition with a simple idea: Reduce malpractice lawsuits by telling patients the truth followed by an apology.

"Basically, what it is is we're advocating good customer service. Without apology and disclosure, there can be no patients' safety because as long as you're coving up and denying, you're never gonna learn," Wojcieszak said.

According to healthcare litigation attorney Jim Saxton even lawyers say empathy works.

"That 'I'm sorry' done the right way with the right process can, number one, derail a lawsuit," Saxton said.

It could also reduce costs. After the University of Michigan health system changed its medical error policy on malpractice cases, legal fees per case were more than cut in half. The legal climate is slowly changing. Twenty-nine states now have laws that protect doctors from lawsuits when they say they're sorry.

It was the apology that opened the door for Kenney the patient and Van Pelt the doctor. "

Anthony Lin of the NYLJ reports today that the Weil Gotshal Legal Malpractice case has ended.

"A Texas bankruptcy judge has thrown out a suit against Weil, Gotshal & Manges by a former client who had accused the New York law firm of steering it into a "disastrous" Chapter 11 filing.

The National Benevolent Association, the social services arm of the Christian Church (Disciples of Christ), filed for bankruptcy in 2004, becoming one of the largest non-profit organizations to have ever done so. The St. Louis, Mo.-based group shrank dramatically as a result of the bankruptcy, and it claimed in its September 2005 suit against Weil Gotshal that the firm should have explored less disruptive alternatives. The group had sought $40 million in damages.

But in granting summary judgment to the law firm in a decision issued Tuesday, Chief Judge Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas said that the association's contentions constituted a collateral attack on previous court orders and were barred by the doctrine of res judicata.

The judge noted in particular that the court had previously issued orders confirming the association's reorganization plan and authorizing the sale of many of the group's properties. There had already been ample opportunity to litigate the issues raised in the suit against Weil Gotshal, he ruled.

The NYLJ article.

The ABA is holding a spring Legal Malpractice Convention. 

The Spring 2007 National Legal Malpractice Conference  will be held on April 25-27, 2007 -in Washington, DC

A recent new rule (22 NYCRR 202.7) regulates  ex parte temporary restraining order and must be based upon a showing of significant prejudice.

Judges are barred from granting restraining orders unless a party demonstrates a significant reason why an adversary must not know of the application in advance. Absent significant prejudice to justify obtaining an ex parte order, the attorney's must advise their adversaries of the time and place they will be asking for a restraining order. No definition of  advance notice is given,  It must be 'sufficient' to allow opposition.

Here is a legal malpractice case from a warm place.  In view of the 9 degree weather this morning, it makes for good reading.  From Day on Torts,[go there for all the links] this blog blurb:

"The Hawaii Supreme Court has ruled that two law firms who represented a party in a business dispute cannot be sued by the adversary party for intentional interference with contractual relations.

Plaintiff had a dispute with a business partner - the two were general partners of a partnership that ran a hotel. The defendant law firms represented the non-plaintiff partner. The dispute ended up in arbitration, and Plaintiff demanded to see certain books and records of the hotel partnership. The law firms took possession of those documents, and Plaintiff sued them for interfering with its right to access to the books and records. The law firms said, inter alia, that the suit was barred by the litigation privilege.

The Court did a nice review of the history of the litigation privilege and ruled that the lawyer's conduct was protected by the privilege. The Court explained that the fact that the arbitration process was temporarily stayed at the time the dispute arose was immaterial.

The case is Kahala Royal Corporation v. Goodsill, Anderson, Quinn and Stiffil, Nos. 26669 and 26670 (Jan. 7, 2007). Read it here.

Like you, I have read a lot of appellate court opinions over the years but this one has a feature I have never seen before. Not only did each of the justices sign the opinion, but each of them signed it without the presence of the traditional signature line for each of the justices. I assume that is some sort of tradition of the Hawaii Supreme Court. I like it.

Here is a worthwhile article, despite some misconseptions about legal malpractice.  The article states:

"As for risk management, the statute of limitations on legal malpractice claims generally begins once a client discovers possible negligence and runs for years thereafter, depending on your state, which could expose a lawyer and its firm to claims well beyond a file's normal retention period. Storing client files electronically makes longer retention periods more cost-effective and long-term risk management more feasible.

This is wrong in NY, as there really is no discovery statute of limitations. While there are exceptions, one should not depend on any date later than the last day the attorney represented the plaintiff. 

In any event, the rest of the article on paper retention and electronic files is worthwhile.

We really had a hard time wrapping our mind around this story.  What is especially interesting is the narcisstic story the protagonist tells on his own web site. 

"Donor battling Hillary now sues Judicial Watch
Peter Paul takes on former legal counsel in case against Clintons 

Business mogul Peter Franklin Paul, who claims he was Sen. Hillary Clinton's top donor in 2000, is suing his former legal counsel, Judicial Watch, charging the government watchdog with fundraising abuses, legal malpractice, false advertising and copyright infringement in his case against the Clintons.

Named in the suit are Judicial Watch President Tom Fitton and directors Paul Orfanedes and Chris Farrell.

Paul claims Judicial Watch, which became known for its many lawsuits against the Clintons in the 1990s, raised millions of dollars to support Paul's whistleblowing activities against the Clintons then redirected the money.

Husband and Wife, both attorneys are on trial for sexual extortion.  Why do we report this case?  The attorneys didn't have enough on their plate with the legal malpractice litigation they pursued.  Perhaps a longer day at the office??

"Two San Antonio, Texas, lawyers, married to each other, face a trial on theft charges based on allegations that the wife had sexual liaisons with four men whom the husband subsequently threatened with litigation unless they compensated him for his emotional distress.

The trial in State v. Mary Roberts, Ted Roberts is scheduled to begin on Feb. 12 before Judge Sid Harle in San Antonio's 226th District Court. Ted Roberts, principal in Ted H. Roberts in San Antonio, is certified in personal injury law and civil trial law by the Texas Board of Legal Specialization, according to the State Bar's Web site. As noted on that Web site, Mary Roberts' primary areas of practice include ethics and legal malpractice, law office management, real estate and wills, and trusts and probate. She is an attorney in her husband's firm.

The whole article.

A Bexar County grand jury first indicted the two lawyers on the theft charges in 2005, identifying the four men who are the complainants only by their initials. A second Bexar County grand jury reindicted the couple in 2006, this time naming the four men: Steve Riebel, Geoffrey Ferguson, Paul Fitzgerald and Reagan Sakai.

The second indictments allege that Mary and Ted Roberts unlawfully appropriated the four men's money by deception and by coercion. According to the indictments, the alleged offenses -- violations of Texas Penal Code §§31.01 and 31.03 -- occurred between Oct. 1, 2001, and April 2, 2002 "

Attorney referrs case to malpractice firm, then after a while, dies.  Widow asks for referral fee on the    $ 875,000  settlement.  Held:  she collects, even when the firm welshes.

Reich v Wolf & Fuhrman, P.C.
2007 NY Slip Op 00623
Decided on January 30, 2007
Appellate Division, Second Department

"In September of 1998, Nelson Cardona retained the defendant law firm, Wolf & Fuhrman (the predecessor to the defendant Wolf & Fuhrman, P.C.), for the purpose of commencing a personal injury action on his behalf. Cardona had been referred to Wolf & Fuhrman by the decedent, Arthur Reich, an attorney who was not associated with Wolf & Fuhrman in any manner. Wolf & Fuhrman, as attorneys of record, subsequently commenced a personal injury action on Cardona's behalf, which, after four years of litigation, was settled for the sum of $825,000. Thereafter, Phyllis Reich, as the Executrix of the Estate of Arthur Reich, commenced the instant breach of contract action seeking to enforce a fee-sharing agreement that had been entered into between the decedent and Wolf & Fuhrman in November 1998.

The Supreme Court granted the plaintiff's motion for summary judgment, denied the defendants' cross motion for summary judgment dismissing the complaint, and awarded the plaintiff the sum of $89,777. A judgment thereafter was entered in accordance with the order. "
he defendants subsequently moved, inter alia, to vacate the order and the judgment on the ground that the Preliminary Letters Testamentary issued to Phyllis Reich as Executrix had expired as of the time the motion and cross motion for summary judgment were made and decided. The Supreme Court denied the motion, finding that the defendants had waived this objection by failing to raise it in opposition to the plaintiff's motion for summary judgment, and that new Letters Testamentary had since been issued to Phyllis Reich, thereby curing any lapse in her capacity to pursue the action.

In fee-sharing disputes between attorneys, "the courts will not inquire into the precise worth of the services performed by the parties as long as each party actually contributed to the legal work and there is no claim that either refused to contribute more substantially" (Benjamin v Koeppel, 85 NY2d 549, 556). This court has held that such an agreement is enforceable so long as the attorney who seeks his share of the fee "has contributed some work, labor or service toward the earning of the fee" (Witt v Cohen, 192 AD2d 528, 529 [internal quotation marks and citation omitted]; Rozales v Pegalis & Wachsman, 127 AD2d 577, 578). Here, the Supreme Court correctly determined, based upon the evidence presented, that the plaintiff's decedent contributed some work, labor, or service toward the earning of the fee. Thus, the plaintiff was entitled to the decedent's share of the fee as allocated in the agreement (see Edelstein v Pirrotti, 286 AD2d 660; Sickmen v Birzon, Szczepanowski & Quinn, 276 AD2d 689).

Contrary to the defendants' contentions, the Supreme Court properly denied their motion to vacate the order and the judgment on the ground that Phyllis Reich lacked the legal capacity to pursue the litigation

May you sue the opponent's attorney?  A quick look at the principal of privity says: "No."  Here is a rare circumstance when you may sue the opponent's attorney.  This particular husband failed; the opening remains, however.

Mars v Grant
2007 NY Slip Op 00576
Decided on January 30, 2007
Appellate Division, First Department

"Plaintiff, who is also the plaintiff in a divorce matter in which his wife is represented by defendants herein, failed to support his pleading of a cause of action under Judiciary Law
§ 487 with allegations that adverse court rulings in the matrimonial action were based on acts of deceit by defendant attorneys (see Melnitzky v Owen, 19 AD3d 201 [2005]), or allegations pleading the required elements of fraud (see Manna Fuel Oil Corp. v Ades, 14 AD3d 666 [2005]), including detrimental reliance (see New York City Tr. Auth. v Morris J. Eisen, P.C., 276 AD2d 78, 86 [2000]). The failure to plead detrimental reliance is also fatal to plaintiff's cause of action for notary liability under Executive Law § 135 (Rastelli v Gassman, 231 AD2d 507, 508 [1996]), which, in any event, is pleaded in conclusory terms without any specificity. "

Today's Law Journal Court Notes has a first.  e-mails of adjournment by stipulation are premitted in the Motion Support Part.  Either a stipulation or an affirmation reciting that oral consent to a stipulation was obtained can be sent by e-mail [and attachment] to NYMOTCAL@courts.state.ny.us by 5:00 pm the night before.  See the court note for full details.

Purchase Partners II LLC v. Westreich, 604219/2004
Decided: January 23, 2007

Justice Bernard J. Fried

Here is a case from the NYLJ which denied disqualification:

Third-party defendant Adam Hochfelder moves for an order: (1) quashing a subpoena, pursuant to CPLR 2304 and 3103[1]; and (2) disqualifying the law firm of Kramer Levin Naftalis & Frankel LLP (Kramer Levin) from continuing to represent defendant/third-party plaintiff Anthony Westreich in these actions.

The complaint in the main action alleges that Hochfelder and Westreich together owned a real estate investment company named Max Capital Management Corporation (Max Capital), which owned an interest in a property located at and adjacent to 260 Park Avenue South (260 Park) (see Complaint, ¶¶11-12, 21). Westreich - and certain of his family members through an entity named DTT Park Avenue South LLC (DTT) - allegedly held a share of Max Capital's interest in 260 Park (see id., ¶22). According to the complaint, plaintiffs are persons and entities who became creditors of Max Capital, Hochfelder and/or Westreich by investing money in, and/or loaning money to, any or all of them (see id., ¶¶15-25).

DR 5-108 (B) provides, in relevant part, that:

Except with the consent of the affected client after full disclosure, a lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client:

(1) Whose interests are materially adverse to that person; and

(2) About whom the lawyer had acquired information protected by [DR 4-101 (B)] that is material to the matter.

Hochfelder has not established that disqualification of Kramer Levin is warranted under DR 5-108 (B) because, as previously stated, he has not established: (a) that he, rather than Belfonti and/or Aligned, was formerly a client of Selver or Paul Hastings; (b) that the matters involved in Selver's and Paul Hastings's prior representation of Belfonti and/or Aligned are substantially related to the matters involved in Kramer Levin's current representation of Westreich; or (c) that the interests of Belfonti and/or Aligned are materially adverse to the interests of Westreich in this action.

Hochfelder has also failed to establish, as required for disqualification under DR 5-108 (B), that Selver, while he was a partner of Paul Hastings, acquired any information which is both "protected by [DR 4-101 (B)]" and "material" to the matter of this litigation. Insofar as Hochfelder may have communicated information to Selver concerning Hochfelder's own prior relations with Max Capital and/or Westreich, such information might be material to this litigation, but would not be protected by DR 4-101 (B) - which concerns the protection of a client's confidences and secrets - because Hochfelder has not established that he was a client of Selver's and/or Paul Hastings's. Conversely, insofar as Selver, in the course of his representation of Belfonti and/or Aligned, may have obtained information concerning Belfonti and/or Aligned which would be protected by DR 4-101 (B), Hochfelder has not established that any such information would be material to this litigation.

Finally, inasmuch as Hochfelder has failed to establish that Selver himself would be disqualified from representing Westreich in this litigation, if he attempted to do so, there is no basis for imputing such a disqualification to Selver's current firm, Kramer Levin.

For the foregoing reasons, it is hereby

ORDERED that the branch of third-party defendant Adam Hochfelder's motion which seeks to disqualify Kramer Levin Naftalis & Frankel LLP from continuing to act as counsel to defendant/third-party plaintiff Anthony Westreich is denied.

Blogs, Web sites, lawyer communications - all are under regulation and potential greater regulation by NYS.  Here is an article about the rules and a case attacking them. 

"A high-volume, heavy-advertising personal injury law firm and a Washington, D.C., advocacy group are apparently the first to challenge the new attorney advertising restrictions that took effect yesterday.

On the same day the new rules were implemented, Alexander & Catalano, with offices in Syracuse and Rochester, and Public Citizen Inc. filed a federal lawsuit in the Northern District alleging the restrictions violate the constitutional right to free speech and impose anti-consumer limits on lawyers' ads.

The suit, filed yesterday in Albany, seeks injunctive and declaratory relief in an attempt to prevent enforcement of the new rules by the disciplinary committees. (The rules are posted at http://www.courts.state.ny.us/rules/attorney_ads_amendments.shtml). " 

From the blog Judicial Reports, which makes for very amusing reading.  It reports all appellate reversals of New York cases.  Here is one in legal malpractice:

"LEGAL MALPRACTICE: Justice Yvonne Lewis granted summary judgment for Ella Jampolskaya in a legal malpractice suit against Victor Gomelsky and his solo law practice firm. The Appellate Division found too many open questions about the case to allow a judge to jump to conclusions about the outcome. Jampolskaya v Victor Gomelsky, P.C. (January 23).  Here is the full case.

It's rather shocking to read a legal malpractice action which arises after the U.S. Navy bombs a U.S. citizen, and at work, no less.  In any event, this legal malpractice case  comes about after the U.S. Navy bombed plaintiff, in error!

"Where (1) an employee of the plaintiff company was injured when a U.S. Navy plane errantly dropped two bombs near the employee's workplace, (2) the injured employee eventually settled with the employer and the employer's insurance carrier for $305,000, (3) the employee's subsequent suit against the Navy was dismissed because the complaint erroneously failed to name the United States as a defendant and (4) the employer and its insurance carrier (the plaintiffs) then brought a legal malpractice action against the employee's attorneys (the defendants), the legal malpractice complaint was correctly dismissed on the ground that the Longshore and Harbor Workers' Compensation Act does not provide the plaintiffs with "a statutory right to seek damages against an injured employee's attorneys for legal malpractice in pursuing the employee's claims against a responsible third party."

The full opinion.

Here is a newspaper article about a case we reported about a week ago.  The story is of a rape victim who lost several rounds of litigation until last week.

Five years and six days ago, a mild-mannered widow with medical problems was raped in a storage unit at Casa Escondida, an Escondido apartment complex that today prides itself on the safety it guarantees older residents.

The attacker, a thin, blond transient who'd reportedly panhandled inside the complex numerous times, vanished.

Last week, the appellate court answered,
In a unanimous opinion written by Justice Cynthia Aaron, Stern received a stern rebuke. The final paragraph of the opinion, though written in legalese, expresses the stark bottom line:

The rape victim “has raised a triable issue of fact as to whether Casa Escondida's failure to properly maintain its doors and locks was a substantial factor in causing her injury. The trial court thus erred in determining as a matter of law that (she) would not have been able to establish the element of causation in the underlying premises liability action and in granting summary judgment in favor of respondents in the legal malpractice action on that basis.”

So, the ending to this story could be written in front a jury. "

Law Com reports on this attorney in Connecticut:   "A veteran New Haven, Conn., lawyer has been suspended from the practice of law for six months for his role in a real estate transaction that may be a blatant case of mortgage fraud. In his special defense against interim suspension, Olmer noted that, in his 53 years of private practice, his disciplinary history includes only one reprimand in 1990. Olmer has been the defendant in five civil suits charging malpractice since 2004. Two of those were dismissed.

While the degree of culpability among those involved is disputed, there's no question in state disciplinary officials' minds that Morris I. Olmer falsely reported the sale price of a West Haven, Conn., property and deserved punishment.

Olmer, a member of the Connecticut Bar since 1953, characterized his handling of the real estate transaction as nothing more than sloppy oversight. He and Chief Disciplinary Counsel Mark A. Dubois' office agreed to a resolution on Jan. 18 in which Olmer admitted "that he neglected to inform his client, the lender ... that the actual sale price of the property ... was not the sale price listed on the [Housing and Urban Development] form ... ." Olmer also represented the seller and the buyer in the deal, according to his signed agreement to disposition.

Because of the falsely inflated sales price, he walked away from the closing with an additional $79,056 in his pocket, according to Olmer's financial statements secured by disciplinary counsel. Other parties involved in the closing received their fees based on the $505,000 figure.

The Madison-St. Claire Record prints more aritlcles about law and legal malpractice than almost any publication, including Law.Com  Here is an article about the inner workings of the Class Action litigation world.

"When the Lakin Law Firm filed its newest class action complaint in Madison County Circuit Court Jan. 22, long time co-counsel Paul Weiss of Freed & Weiss in Chicago was noticbly missing from the complaint.

According to attorney Richard Burke, Lakin's former class action boss who was fired Jan. 4, firm president Brad Lakin also severed ties with Freed & Weiss.

Burke, who filed a breach of contract suit against Lakin and the firm in federal court this week, claims Lakin ordered that all clients be issued letters informing them that they had to choose between representation by the Lakin Firm or the Freed & Weiss firm.

Freed & Weiss is listed as co-counsel on at least 77 class action cases in Madison and St. Clair Counties.

Burke claims Lakin was acting the way he did because he was personally under investigation by the Illinois Bar for accusations of ethical misconduct; he and members of his family had been under investigation by law enforcement authorities; and the Lakin Firm was being excluded from participation by other plaintiffs class counsel in class action litigation pending in other jurisdictions.

He also claims that defendants in class actions were beginning to attack the Lakin firm as adequate class counsel, all as a result of the personal scandals of the Lakin family and Bradley Lakin.

According to Burke, the Lakin Law Firm does not have sufficient experienced and competent staff to prosecute the class actions already filed.

Burke believes the Lakin firm has replaced him with younger, inexperienced attorneys whom may not be able to properly represent the interests of the class.

With his termination and the termination of the Freed & Weiss, Burke claims Lakin removed from the putative class clients almost all of the institutional knowledge related to the representation of these clients solely for his own personal gain.

Burke claims Lakin wanted to terminate his employment with because he knew that he would not allow Lakin to subvert the best interest of the class action clients and the certified classes to the personal interest of Bradley Lakin and the Lakin family.

He claims his firing was done to humiliate him and cause emotional distress to satisfy Lakin's desire to inflict suffering. "

e-Discovery.  Its all over the news, and if you look at any glossy legal magazine, it's in all the ads.  Does one use a professional e-Discovery company to mine opponent's computers?  Will the big firms form in-house e-Discovery units?  What document retention policy to use?  Here is an article about the legal malpractice aspect of it all.

A  common law retaining lien, known also as a "general possessory lien" entitles the outgoing attorney to "retain all papers, securities, or money belonging to the client" that came into the attorney's possession in the course of representation, as security for payment of attorney's fees"

A retaining lien arises from Judiciary Law § 475 and is a statutory lien upon service of a notice of lien, which attaches to the case papers, and allows the attorney to retain as in the "general possessory" lien. It is enforceable only by retention of the items themselves and is lost if the file or documents are no longer in the attorney's possession.

A charging line similarly arises from Judiciary Law § 475, and allows for a "statutory lien upon service of a notice of lien, which attaches to any recovery and thus secures the attorney's right to compensation."

All of these liens are extant so that the monies or securities held by the attorney are kept available for an attorney fee hearing. That hearing will be held to determine the amount of fees, based upon a quantum meruit determination.

"While Retrieving Drunken Client, Lawyer Is Busted for Drunken Driving
The Associated Press
January 30, 2007

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Police arrested a Madison, Wisc., lawyer for drunken driving after he went to the station to pick up a client who had been arrested for the same offense.

"I can't tell you how humbled I am, how embarrassed I am," said Madison lawyer Rick Petri, who once prosecuted drunken drivers for the Madison city attorney's office.

Petri's client, former Dane County Board member Patrick DePula, 34, was arrested early Thursday for drunken driving, Madison police spokesman Mike Hanson said. His blood alcohol concentration was 0.08 percent.

Petri, 64, said he had been out the same evening, had a couple of drinks and went home about 8 p.m. to watch the Badgers basketball game. He said he had a couple more drinks, then went to bed.

He said Madison police called around about 2 a.m. Thursday asking him to pick up DePula.

Petri said the officer asked if he had been drinking, and said he could only come if he had no alcohol in his system.

He said he was certain his blood-alcohol concentration was under 0.08 percent, the legal limit for drunken driving in Wisconsin.

"I did not think I was intoxicated, and I was wrong," Petri said."

Successful disqualification of your opponent's attorney happens fewer times than one might guess.  Here is a successful disqualification:

"Finkelman v. Greenbaum, 8998-06
Decided: January 10, 2007

Justice Leonard B. Austin

NASSAU COUNTY
Supreme Court

PLAINTIFF MOVED to disqualify the firm of Doyle and Broumand LLP as attorneys for defendants, alleging the firm represented entities that were the subject of the disparity agreement in the instant matter and currently represented an entity in which plaintiff was a managing member. Defendants cross moved to dismiss the amended complaint. The court found the law firm represented HPS Holdings LLC in which plaintiff owned a 20 percent interest and was the co-managing member, in an action pending in the Bronx Supreme Court, noting once the firm realized that a potential conflict existed it sought to obviate the conflict by withdrawing as counsel for HPS. It stated the firm's representation of HPS pre-dated its representation of defendant Greenbaum in this action, thus it was breaching its duty of loyalty to HPS by seeking to withdraw as counsel so that it could represent Greenbaum in the instant action. Hence, the court ruled a conflict or potential conflict existed mandating disqualification of the firm. "

Here is a well written and educational decision on a Morgan Lewis motion for summary judgment for legal fees based upon "account stated." 

It's not often that the law firm loses this motion.  Read part of Justice Richter's decision:

In this action, plaintiff-law firm Morgan, Lewis & Bockius LLP ("Morgan Lewis") alleges that its former client, defendant IBuyDigital.com, Inc. ("IBuy"), failed to pay legal bills totaling nearly $800,000. The complaint alleges two causes of action: account stated and quantum meruit. In its answer, IBuy asserts numerous affirmative defenses and counterclaims alleging breach of contract, legal malpractice, fraud, fraudulent inducement and breach of fiduciary duty. In this motion, Morgan Lewis seeks summary judgment on the account stated claim and dismissal of all of IBuy's affirmative defenses and counterclaims. IBuy cross-moves to dismiss the complaint in its entirety or, in the alternative, to dismiss the quantum meruit claim and to limit the dollar amount of Morgan Lewis's alleged damages.

"Morgan Lewis moves for summary judgment on its account stated claim. It is well-settled that the receipt and retention of an invoice without objection within a reasonable period of time may give rise to an account stated claim. Werner v. Nelkin, 206 A.D.2d 422 (2d Dept. 1994); Rockefeller Group, Inc. v. Edwards & Hjorth, 164 A.D.2d 830 (1st Dept. 1990). However, "[a] key element of a prima facie account stated claim is evidence that [the plaintiff] delivered one or more invoices for the amount claimed to defendant, so that he received them." Commissioners of State Insurance Fund v. Kassas, 5 Misc.3d 1012A (N.Y.C. Civ. Ct. 2004). Where a plaintiff's evidence fails to establish that the invoices were properly addressed and mailed, there should be no presumption of receipt, and summary judgment on an account stated claim is inappropriate. Morrison Cohen Singer & Weinstein, LLP v. Brophy, 19 A.D.3d 161 (1st Dept. 2005); Citibank (S.D.), N.A. v. Martin, 11 Misc.3d 219 (N.Y.C. Civ. Ct. 2005) (the plaintiff on an account stated claim must show mailing of the account or alternate proof showing the account was received).

Judged by these standards, the Court concludes that Morgan Lewis has failed to meet its prima facie showing that it is entitled to summary judgment on its account stated cause of action. Morgan Lewis's claim to summary judgment is supported only by an affidavit of Morgan Lewis partner David J. Sorin. In that affidavit, Sorin states, in conclusory fashion, that Morgan Lewis submitted periodic invoices to IBuy.3 There is no evidence submitted, however, of the basis for Sorin's knowledge that the bills were in fact mailed, or any proof that they were mailed on a particular date. Of course, the date of mailing is crucial in determining whether the bills were held for a unreasonable time without objection.4 Nor is there any prima facie showing of a regular office procedure for outgoing mail.

In light of these deficiencies, Morgan Lewis's motion for summary judgment on the account stated claim must be denied. See Morrison Cohen Singer & Weinstein, LLP v. Brophy, 19 A.D.3d at 161 (reversing lower court's grant of summary judgment on account stated claim due to the plaintiff's failure to submit evidence of a regular office mailing procedure and the dates when the disputed invoices were allegedly mailed); Legum v. Ruthen, 211 A.D.2d 701 (2d Dept. 1995) (reversing grant of summary judgment on account stated claim where there was no proof as to the date the bill was submitted); Commissioners of State Insurance Fund v. Munkacs Car Service Ltd., 11 Misc.3d 802 (N.Y.C. Civ. Ct. 2006)(dismissing account stated claim after conclusion of the plaintiff's evidence at trial because the plaintiff provided no evidence that the invoices were mailed to the defendant, let alone received); Commissioners of State Insurance Fund v. Kassas, 5 Misc.3d at 1012A (an inadequate showing of transmittal of invoices compels denial of summary judgment on account stated claim); see also New York & Presbyterian Hospital v. Allstate Insurance Company, 29 A.D.3d 547 (2d Dept. 2006)(summary judgment unwarranted since the affidavit of the plaintiff's principal did not state that he personally mailed the claims nor describe the office mailing practice or procedures); Response Medical Equipment v. General Assurance Company, 13 Misc.3d 129A (App. Term 1st Dept. 2006)(same); cf. Ruskin, Moscou, Evans, & Faltischek, P.C. v. FGH Realty Credit Corp., 228 A.D.2d 294 (1st Dept. 1996)(granting summary judgment on account stated based on prima facie showing that defendant actually received the bills in question).

Even if the Court were to accept Sorin's vague affidavit as proof of mailing, there is a disputed issue of fact because IBuy's Chief Executive Officer Elliot Antebi, to whom the invoices were allegedly sent, has submitted an affidavit stating that he never received any of the invoices. In its reply papers, Morgan Lewis attempts to remedy its failure to set forth a prima facie showing by submitting affidavits from several office workers at Morgan Lewis explaining the firm's invoice mailing procedures. However, it is well-settled that a plaintiff seeking summary judgment may not cure its failure to establish a prima facie case by submitting the missing evidence by way of reply. Thus, the Court cannot consider these reply submissions.5 See Batista v. Santiago, 25 A.D.3d 326 (1st Dept. 2006)(to meet its prima facie burden, summary judgment movant could not rely on evidence submitted for the first time in its reply papers); Rengifo v. City of New York, 7 A.D.3d 773 (2d Dept. 2004)(same); Migdol v. City of New York, 291 A.D.2d 201 (1st Dept. 2002)(same); Power Cooling, Inc. v. Wassong, 5 Misc.3d 22 (App. Term 1st Dept. 2004)(same); Chase Manhattan Bank v. New Hampshire Insurance Company, 4 Misc.3d 1026A (Sup. Ct. N.Y. Cty. 2004)(same).

This case is strikingly similar to Reliable Medical Services, P.C. v. Travelers Indemnity Company, 12 Misc3d 147A (App. Term 1st Dept. 2006). In that case, the court denied the defendant's cross-motion for summary judgment on an insurance payment claim because "the affidavit of [the] defendant's representative, submitted to establish proof of mailing of the verification requests, neither stated that she personally mailed the requests nor described [the] defendant's mailing office and procedures." 12 Misc.3d at 147A. The Court then went on to reject the defendant's attempt to remedy the deficiency by submitting proof of mailing in a reply affidavit. See also Mid Atlantic Medical, P.C. v. Travelers Indemnity Company, 12 Misc.3d 147A (App. Term 1st Dept. 2006)(same). Similarly, Morgan Lewis's submission of its reply affidavits cannot cure its failure to have submitted them in its original motion papers. See Abramson v. Hertz, 19 A.D.3d 305 (1st Dept. 2005)(the plaintiff failed to adduce evidence sufficient to make out a prima facie entitlement to attorneys' fees on an account stated theory, and the invoices submitted for the first time in reply papers were properly disregarded by the lower court).

Upstate law firm Upton, Cohen & Slamowitz are still in a EDNY debt collection case brought by an irate consumer.  The consumer's claim is that the law firm did not follow the Fair Debt Collection Practices Act (FDCPA) obligation to review the case before sending a dunning letter, and that it have meaningful attorney involvement,.

The case continues.

"In rejecting Upton Cohen's summary judgment motion last week, Eastern District Judge Raymond Dearie ruled that Upton Cohen had not sufficiently shown it had conducted an adequate review of Mr. Miller's file.

"Neither the facts about defendant's familiarity with its client, nor those about the procedure it followed prior to sending the July 18, 2000, debt collection letter to plaintiff, preclude the possibility that a reasonable jury could find that it failed to satisfy [the FDCPA's] requirement for meaningful attorney involvement," Judge Dearie wrote in Miller v. Wolpoff & Abramson, 01 Civ. 1126.

He noted that the act requires that lawyers sending debt collection letters to have made some independent evaluation of the claims and not simply rely on a client's assertion that a debt is owed. He said Mr. Slamovitz's review of the facts appeared to have been "largely ministerial," with the lawyer relying heavily on the department store's version of events.

Judge Dearie further noted that Mr. Slamovitz's reliance on Lord & Taylor did not appear to be based on any knowledge of the store's review procedures with regard to overdue accounts.

Upton Cohen's large volume of debt collections also factored into the judge's decision. He noted that the firm sent letters to 3,284 debtors in July 2000. This level of activity "raises doubts about defendant's claims to have conducted a careful review of plaintiff's file," the judge wrote.

Mr. Miller also had originally sued Rockville, Md.'s Wolpoff & Abramson, a much larger debt collection firm that referred the case to Upton Cohen. But that firm reached an agreement with the plaintiff.

Upton Cohen was represented by Mark Anesh of Wilson Elser Moskowitz Edelman & Dicker."

In NC as in New York, plaintiff must provide a ceritificate of merit for a medical malpractice case. In NC, the question of whether a legal malpractice plaintiff who is suing over a lost medical malpractice case must provide yet another certification when the legal malpractice case is brought was open. 

Plaintiff won in the intermediate Court of Appeals, with a determination that no new certificate had to be filed.  Defendants appealed to the Supreme Court of NC, where an evenly divided panel neither affirmed nor reversed, leaving the Court of Appeals decision in place, without precedential value.

The report.

We are located in Manhattan.  In New York State, the vast majority of courts are small:  Villange and Town courts.  They range over the 62 counties, even in the Second Department.  Here is a chilling story about how justice goes on in these small courts.  When finances are so badly handled, can legal malpractice be far behind?

Here is the re-print from the NYLJ/LawCom of Howard Bashman's article, to which we alluded in an earlier blog:

"Some judges are crooked. Others are idiots. And some ignore or distort the facts and applicable law to reach results more to their liking than the facts and law, honestly portrayed, would allow.

When appealing from a ruling of an incompetent or dishonest trial judge, appellate lawyers often must wrestle with the extent to which the trial judge's incompetence or dishonesty should be directly condemned in the brief. Similarly, when an appellate court judge believes that colleagues have reached an incorrect result, the appellate judge must decide the extent to which any separate opinion should condemn the other judges' stupidity or dishonesty.

In my experience, in an appeal that is challenging the substance of a trial judge's ruling, it is preferable to demonstrate as clearly as possible that the ruling is wrong rather than to try proving that the trial judge was dishonest or incompetent.

As appellate judges are well aware, even the smartest and most highly qualified trial court judges can sometimes reach erroneous results, and thus a direct assault on a trial court judge's qualifications or motivations is usually, in the appellate court's eyes, irrelevant to the central issue of whether the decision should be upheld or overturned. Also, an attack on a trial court judge's integrity runs the serious risk of offending the appellate judges -- not typically the best way to convince another person to agree with the position that one is advocating. "

Here is a scholarly article of law review quality on Attorney-Client Privilege and implied waiver, from Lawrence M. Steckman of Lester, Schwab,Katz & Dwyer.  Here is the re-printed article.

Here is a blog blurb from Eric Turkowitz and his New York Personal Injury Blog.

"Howard Bashman (How Appealing) comments today in a nice article at Law.com (Decorum on Appeal: When Judges Are Under Attack) on the recent Utah Supreme Court decision to sanction a law professor $17,000 for the disrespect he showed to the appellate court below. I wrote about this on Friday, with a link back to the ABA article on the subject.

Bashman's treatment of the subject is good reading for anyone that intends to litigate anything.

What was also interesting about the decision is that the court didn't decide the merits of the appeal. I suppose, theoretically, there is a legal malpractice case there as a result of the client losing his case like that. But in order to prevail, the plaintiff must ultimately end out back in the Utah Supreme Court and get a reversal of the lower appellate court ruling.

That sounds like a long, miserable experience, and judicial economy doesn't seem to be served here without a decision on the merits when it first appeared before the court.

This took several readings but the scholarly article seems to say that there have been changes in Kentucky tax law, and that LLCs and other statutory entities may need to be changed, and that attorneys who advised clients to use these entities now need to tell the former clients that changes have to be made.  Read the abstract.

We can't tell if this is accurate, inaccurate or simply a rant.  It's a story about asbestos litigation, legal malpractice, and the banning of a law firm from filing asbestos cases in a prime California venue.  Read for yourself.

"Houston's Vinson & Elkins, longtime outside counsel for Enron Corp., was dismissed from a massive shareholder securities class action filed by disgruntled Enron shareholders.

In an order signed Wednesday, U.S. District Judge Melinda Harmon of Houston dismissed a number of other defendants from the class action, which is set for trial in April, including former Enron executives Lou Pai, Kenneth Rice, Joseph Hirko, Kevin Hannon and Lawrence Greg Whalley. She also dismissed the estate of former Enron Chairman Kenneth Lay, who died in July 2006 after he was convicted in federal court of criminal charges stemming from the collapse of Enron.

Harmon's order grants a motion filed by the plaintiffs to voluntarily dismiss V&E and the others from Mark Newby, et al. v. Enron Corp., et al., which seeks billions of dollars in damages from Enron-related defendants. "

"Houston's Vinson & Elkins, longtime outside counsel for Enron Corp., was dismissed from a massive shareholder securities class action filed by disgruntled Enron shareholders.

In an order signed Wednesday, U.S. District Judge Melinda Harmon of Houston dismissed a number of other defendants from the class action, which is set for trial in April, including former Enron executives Lou Pai, Kenneth Rice, Joseph Hirko, Kevin Hannon and Lawrence Greg Whalley. She also dismissed the estate of former Enron Chairman Kenneth Lay, who died in July 2006 after he was convicted in federal court of criminal charges stemming from the collapse of Enron.

Harmon's order grants a motion filed by the plaintiffs to voluntarily dismiss V&E and the others from Mark Newby, et al. v. Enron Corp., et al., which seeks billions of dollars in damages from Enron-related defendants. "

"This legal malpractice action arises out of defendants' representation of plaintiff and his wife in an action brought by plaintiff's former landlord, Solow Management Corp. (Solow) to recover, among other things, rent arrears in the amount of $180,313.57.

To prevail in an action to recover damages for legal malpractice, the plaintiff must establish that the defendants "failed to exercise that degree of care, skill, and diligence commonly possessed and exercised by an ordinary member of the legal community, that such negligence was the proximate cause of the actual damages sustained by the plaintiff, and that, but for the defendant's negligence, the plaintiff would have been successful in the underlying action" (see Laventure v. Galeno, 307 AD2d 255 [2nd Dept. 2003]).

In the case at bar, there is no question that defendants' negligently prepared and filed the CPLR3219 tenders. A trial court of coordinate jurisdiction and the Appellate Division has already ruled as such. This court is not going to entertain arguments made by defendants to the contrary. Here, no issue of facts exists, the plaintiff established his entitlement to judgment as a matter of law by demonstrating that "but for" the negligence of the defendants, they would not have incurred certain damages in the underlying action. Moreover, the discovery requested by the defendants in opposition to plaintiff's motion is without merit. "

"An attorney who allegedly hired an investigator to locate and solicit accident victims then failed to pay the investigator's finder's fee has successfully moved to dismiss the investigator's suit for non-payment on the grounds of illegality.

"The agreement alleged by plaintiff is one between a nonlawyer and attorneys to split legal fees which is proscribed by Judiciary Law §491," a unanimous Appellate Division, First Department, panel held in Bonilla v. Rotter, 9806. "Accordingly, the agreement is illegal and plaintiff is foreclosed from seeking the assistance of the courts in enforcing it."

"An attorney who allegedly hired an investigator to locate and solicit accident victims then failed to pay the investigator's finder's fee has successfully moved to dismiss the investigator's suit for non-payment on the grounds of illegality.

"The agreement alleged by plaintiff is one between a nonlawyer and attorneys to split legal fees which is proscribed by Judiciary Law §491," a unanimous Appellate Division, First Department, panel held in Bonilla v. Rotter, 9806. "Accordingly, the agreement is illegal and plaintiff is foreclosed from seeking the assistance of the courts in enforcing it."

"A tenant who lost her suit against the owners and managers of the apartment complex at which she was raped has a viable malpractice claim against the lawyers who represented her in the matter, the Fourth District Court of Appeal ruled yesterday.

After initially meeting with Kelegian, she saw him only on one other occasion, her deposition, she claimed. When she showed up to court for trial as instructed in a letter from Kelegian, the lawyer never arrived and left her to wait for three hours before she finally learned her case had been dismissed.

The lawyers moved for summary judgment, claiming that Ambriz could not have established Casa Escondida owed her a duty to better secure the premises from intruders in any event, and thus they could not be liable for malpractice.

Stern agreed, finding Ambriz did not proffer sufficient evidence to create a triable issue as to whether the complex’s failure to properly maintain its doors and locks was a substantial fact in causing her injury.

But Justice Aaron, writing for the court, said:

“In view of the repeated security breaches and the known presence of unauthorized male intruders, a violent attack by an intruder was sufficiently foreseeable that Casa Escondida had a minimal duty to properly maintain the locks on the doors and gates to the complex and its buildings.”

The case is Ambriz v. Kelegian, D046453. "

Strange $54 Million Fee-Split Saga Haunts Thelen

"Secrets, lies and betrayal are the heart of any good story.

Add an itinerant Frenchman with dark secrets and a powerful American law firm -- first fighting together to expose millions of dollars in fraud, now locked in bitter battle of money and ethics themselves -- and you've got an epic.

The long-running saga began with allegations of French banks secretively, and illegally, buying a California insurer. It has devolved into a battle over millions of dollars because of shifting -- and questionable -- fee-splitting deals between Thelen Reid Brown Raysman & Steiner and the informant it once represented.

Last February, Francois Marland, the French lawyer and holder of secrets, demanded arbitration over the fee-sharing deal. Thelen, represented by top-flight litigators at Keker & Van Nest, has responded with a lawsuit to cut him off. The showdown trial is scheduled for this summer in the Northern District of California.

At issue is $54 million that the law firm (then Thelen Reid & Priest) was paid for its work in a case that wrought a $715 million payout from a consortium of French bankers in 2005. The fee-sharing agreement in the dispute has raised the hackles of legal ethicists, who say some provisions skate dangerously close to buying Marland's testimony.

According to filings made in Thelen's suit, Marland has been paid $19 million of Thelen's fees. Still, he accuses Thelen of betraying him with another client and putting the firm's interests ahead of his. He's looking for $35 million or a greater cut of the contingency fee.

Thelen's suit claims it doesn't owe him anything else and wants the court to uphold the latest draft of Marland's fee agreement "

Daniel. Sheehan recently earned selection to the Lawdragon 500 Leading Plaintiffs’ Lawyers in America list.

"In addition to his dual Lawdragon honors, Mr. Sheehan has been named a Texas Super Lawyer in Texas Monthly magazine each of the past four years. Super Lawyers are selected by their peers and represent the top 5% of attorneys in Texas. His many awards are supported by his achievements in the courtroom. Mr. Sheehan has obtained more than a dozen seven-figure verdicts in business litigation. In the past five years alone, he has collected more than $23 million for clients in seven major legal malpractice cases.

Mr. Sheehan is Board Certified in Civil Trial Law by the Texas Board of Legal Specialization. He regularly handles trials and appeals in state and federal courts, including cases before the Supreme Court of Texas and the U.S. Supreme Court.  $ 23 Million! 

Disbarred attorney "Bubba" Haupt has caused another attorney to be suspended. "Richmond Hill attorney Murl "Gene" Geary has been suspended from practice for a year for mishandling a case with disbarred lawyer Reginald "Bubba" Haupt. :  The underlying case was a legal malpractice.  Here is the Savannah Morning News article.

Disbarred attorney "Bubba" Haupt has caused another attorney to be suspended. "Richmond Hill attorney Murl "Gene" Geary has been suspended from practice for a year for mishandling a case with disbarred lawyer Reginald "Bubba" Haupt. :  The underlying case was a legal malpractice.  Here is the Savannah Morning News article.

The New York Post reports that Anonymous Judge threatened well known attorney Ravi Batra for bringing a legal malpractice case against an attorney who later became a judge. 

Anonymous Judge threatend "that he would never win another motion or case in Manhattan again because of his lawsuit against now-Judge George Silver.   Batra made the accusation in a motion to move his case to Staten Island.

His malpractice suit was filed on behalf of a woman named Margherita Merola, who's suing Silver and his former law partner, Steve Santo. She accused them of fumbling a lawsuit and then trying to cover it up with faked court documents. "

The NY Times reports that Mr. Batra is well known to judges in NY and has on ocassion defended them.  

Who is Anonymous Judge????   The NY Post article identifies Anonymous Judge as a "her."    The case is assigned to Justice Braun, indisputably a male.  Who is Anonymous Judge?

Here is the legal malpractice case from the biggest verdicts in Kansas of last year.

"•$3 million in a breach of fiduciary duty and legal malpractice claim against Sanford Krigel and Krigel & Krigel.

The plaintiff alleged she hired the defendants after she decided to give up her baby for adoption. The defendants also represented the adopting couple. After the plaintiff gave birth, she decided to keep the baby, but the adoption went ahead. Krigel claimed that he referred the plaintiff to another attorney and did not work for her. Other lawyers involved in the case settled before trial for undisclosed amounts. "

Here is a decision from Justice Diamond in New York County, dismissing a legal malpractice case on collateral estoppel.  Tydings v, Greenfield, Stein & Senior LLP.  The case is reported in today's NYLJ [subscription].

"It is ordered that: This is a legal malpractice action. Plaintiff Frieda Tydings is a former trustee of an irrevocable inter vivos trust created in 1993 by and for the benefit of an individual named Ricki Singer. On January 1, 1997, plaintiff resigned as trustee and was replaced by a successor. On August 21, 2003, Singer commenced a proceeding in the Surrogate's Court, New York County, in which she sought a compulsory accounting from both plaintiff and the successor trustee. Plaintiff retained the defendant law firm, Greenfield, Stein & Senior, LLP, to represent her in the accounting action. Plaintiff claims that defendant never filed an answer or any other response to Singer's petition for a compulsory accounting and that, as a result, on September 24, 2003, the Surrogate's Court issued an order requiring her to provide an accounting. Thereafter, defendant withdrew as plaintiff's counsel in the Surrogate's Court proceeding and plaintiff filed a final accounting on November 14, 2004.

On November 16, 2005, Singer filed objections to plaintiff's accounting and sought to charge plaintiff with respect to matters that occurred before her resignation as trustee in 1997. Plaintiff, through her new counsel, filed a motion to dismiss the objections, pursuant to CPLR 3211(a)(5), on the ground that the six-year statute of limitations for accounting actions had expired prior to the filing of Singer's petition to compel an accounting. On January 27, 2006, the Surrogate's Court (Renee Roth, J.) denied plaintiff's motion on the grounds that (1) the accounting six-year statute of limitations had not yet expired by the filing date of the petition and (2) plaintiff waived the statute of limitations defense by failing to assert it in a timely manner. See In re Singer, 12 Misc3d 621, 624-26 (Surr's Ct NY Co 2006). On appeal, the order was affirmed solely on the issue of waiver. See In re Singer, 30 AD3d 211 (1st Dept 2006). The First Department did not address the issue of whether the plaintiff's statute of limitations defense would have been valid if it had been timely asserted. This legal malpractice action then followed. The defendant now moves to dismiss the complaint, pursuant to CPLR 3211 (a)(1), (5) and (7), on the grounds that the complaint fails to state a cause of action and/or is barred by collateral estoppel. "

"One of three lawyers accused of plundering Kentucky's $200 million fen-phen settlement said he and his colleagues "tore up or burned" notes showing how much they paid themselves and their clients.

Depositions obtained by The Courier-Journal include Lexington attorney Melbourne Mills Jr.'s description of a meeting that he said he and lawyers William Gallion and Shirley Cunningham Jr., also of Lexington, held at Gallion's house in 2001 to divvy up an extra $10 million beyond what they'd already paid themselves from the settlement. ""She has asked that those lawyers and another attorney, Stan Chesley of Cincinnati, who helped negotiate the settlement, be forced to surrender $62.6 million in funds as well as $59.5 million they paid themselves in fees. "

Thearticle.

Here is a sad case from New Jersey.  Attorney Luhn is found to be a compusive gambler, an embezzeler, a bankrupt and, still, the legal malpractice plaintiff had to go through a full trial and appeal to get his monies back. 

"Based upon his findings, Judge Gilroy concluded that Luhn breached a professional duty of care to plaintiff which proximately caused plaintiff's damages, namely the loss of his investment. The judge concluded that, while Luhn's breach of duty may not have been the only proximate cause of plaintiff's loss, it was a substantial factor. The judge found the Courter firm vicariously liable because of its master-servant relationship with Luhn, and because Luhn was plainly acting within the scope of his employment with the Courter firm. ""Luhn did not disclose that he was a compulsive gambler.""In 1997, Luhn's partners in the new firm discovered that he was embezzling funds""Luhn and his wife filed a petition in bankruptcy, resulting in an automatic stay of this action with respect to them""Luhn and his wife filed a petition in bankruptcy, resulting in an automatic stay of this action with respect to them"

Plaintiff finally won a judgment, along with legal fees.  The NJ case.

Chron Com reports:  "Houston-based law firm Andrews Kurth has agreed to pay Enron's bankruptcy estate $18.5 million to settle potential malpractice claims stemming from legal advice on various transactions.

Enron's estate never actually sued Andrews Kurth for allegedly signing off on dubious deals, and the law firm denies any wrongdoing in its work for the company.

"As noted in the motion that was filed yesterday with the bankruptcy court, we have continuously denied wrongdoing and culpability with respect to our work for Enron," Andrews Kurth managing partner Howard Ayres said in a statement today. "We felt, though, after the passage of five years, that it was expedient to enter into the settlement to put this matter behind us."

U.S. Bankruptcy Judge Arthur Gonzalez must approve the accord. "  The entire article.

"The former Citigroup broker for convicted WorldCom chief executive Bernard J. Ebbers is suing Paul, Weiss, Rifkind, Wharton & Garrison, claiming the law firm was conflicted when it advised Citigroup on the broker's severance package.

David H. Trautenberg, the former co-head of the bank's private wealth management group, was a significant figure in litigation arising from WorldCom's collapse, having orchestrated massive loans for Ebbers' personal account. Shareholders and regulators had accused Citigroup of offering such perks as well as favorable research coverage in order to maintain its position as WorldCom's chief investment bank. The bank ultimately paid close to $3 billion to settle claims relating to WorldCom.

Paul Weiss defended Citigroup against shareholder and government suits, representing Trautenberg in his capacity as a bank employee. In a suit filed last month in Manhattan federal court, Trautenberg claims the firm and partners Brad S. Karp and Daniel J. Toal gained confidences in the course of that representation which it then used against him in subsequent negotiations over his 2004 departure from Citigroup.

"Defendants were blinded to their fiduciary duty to Trautenberg by the legal fees they were receiving from Citigroup and its subsidiaries well in excess of $100,000,000," the complaint claims. Trautenberg, who received a $5 million severance payment, claims he would have received $25 million but for Paul Weiss' involvement. He is seeking $80 million in damages from the firm. "  The story.

Blind lawyer needs an office manager.  State agency which helps the blind sends him an office manager.  Problem?  The manager already had theft history and then steals blind lawyer's money.  Is the agency possibly liable?  More detalis to come.  The story.

CPLR 205a is a not well known, but very important statute which allows a plaintiff to re-file a complaint which is dismissed, if it was timely when filed, where jurisdiction was obtained over the defendants, and it was not dismissed on the merits or for failure to prosecute.  It may come into play when cases are dismissed for failure to state a cause of action under CPLR 3211(a)(7)

"The New York Court of Appeals has been asked to clarify the law on a statute that allows parties to save an action that has been terminated if they commence a new action within six months.

The U.S. Court of Appeals for the Second Circuit yesterday certified a question to the state's highest court on New York's "savings" statute, CPLR §205(a).

The question presented to the circuit was whether a corporation can refile an action within six months when a previous action had mistakenly been commenced in the name of a different, related corporate entity and has been dismissed for naming the wrong plaintiff.

The purpose of the statute, the New York Court of Appeals said in George v. Mt. Sinai Hosp., 390 N.E. 2d 1156 (1979), was "to ameliorate the potentially harsh effect of the statute of limitations in certain cases in which at least one of the fundamental purposes of the statute of limitations has in fact been served, and the defendant has been given timely notice." "

Here is a write-in-your-complaint web site.  It's one variety of calls a legal malpractice attorney gets.  What would be your advice?  The client's potential complaint:

"I consulted a lawyer in 1998 about defective product that was installed in my home. The charge was $3000 and I wanted it fixed. The lawyer said I could fight it in court but it would cost me the $3000 to fight it or have a letter sent to the installer asking for it to be fixed or we would sue hoping he would make it right. He sent the letter and we waited.

The installer ended up suing us and the lawer agreed to fight it for $3000. In arbitration we were offered $1000 off of the bill but the lawer said that he could get us the full amount in court. He said our charges up to that point was $2500 (which we paid) and that he would take it to court for the additional $500 since most of the preperation was complete so the most we would be out was an addition $1500 if we lost. It turns out he was wrong. Not only did he lose the case, but we were sued for additional legal fees due to having rejected the arbitration. We had to pay the opposing lawyer $3000 on top of the bill plus interest.

For two years we heard nothing more from our attorney and we assumed he ate the additional $500 since his advice had cost us so much. 2 years later he sent us a bill for almost $7000. We sent him a letter asking what happened to our agreement that he would handle the rest of the case for $500 and we heard nothing more from him for 4 more years and now he is suing us for $7500. "

"William F.McMurry, a trial specialist in medical and legal malpractice says, "The
primary purpose of the suit is to hold the Vatican accountable and this
ruling gives us the opportunity to get a hold of church documents and take
depositions of church officials."

William F. McMurry is the only Kentucky lawyer certified as a medical
malpractice and legal malpractice trial specialist by the American Board of
Professional Liability Attorneys (ABPLA). The National Board of Trial
Advocacy (NBTA) also certifies McMurry as a civil trial specialist. "

McMurry reports that he "successfully represented over 243 plaintiffs that settled a
suit for $25.3 million against the Archdiocese of Louisville in 2003. He is
currently seeking class action status in the suit against the Vatican. "

"Foley & Lardner Sued Over Missed Biotech Patent Filing
Zusha Elinson
The Recorder
January 17, 2007

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Apparently, there's no vaccine for legal malpractice suits against IP lawyers.

A fledgling San Diego biotech company is suing Foley & Lardner for allegedly missing the filing date on an international patent application.

Vaxiion Therapeutics Inc., which develops new ways to deliver vaccines using genetically engineered mini-cells, claims attorneys in Foley's San Diego office missed the deadline by four days, allowing a competitor to cash in on the same intellectual property, according to a complaint filed in San Diego County Superior Court late last month.

The kicker is that Foley allegedly represented the competitor, EnGene Inc., at the same time without notifying Vaxiion, causing a conflict, according to the suit.

"We believe the allegations being made in this action are meritless, and we are in the process of preparing our defense," said Foley partner James Clark in an e-mail. "Beyond that, it is our policy not to comment outside of the court proceeding with regard to the details of matters involving former clients."

Vaxiion and its lawyer, Vincent Bartolotta Jr. of San Diego's Thorsnes Bartolotta McGuire, are seeking damages but have not disclosed the amount.

"We want to be put back in the position we were in before this happened," Bartolotta said, adding that there's a lot of money at stake. "The potential harm is 100 million or more," he said.

The suit comes on the heels of a California Supreme Court decision last year to let stand a lower court ruling on a malpractice award of about $30 million against Boston-based Fish & Richardson over similar allegations. In that case, Kairos Scientific Inc., a San Diego chemical digital imaging company, won the judgment after Fish's Redwood City, Calif., office failed to file a patent in a timely fashion.

Claims like these are a sign of the ever-increasing value businesses place on intellectual property, IP lawyers say.

"The reason why they're increasing is because patents are so much more valuable, not because more deadlines are being missed," said Raymond Sweigart, an IP litigator at Pillsbury Winthrop Shaw Pittman.

And it's not just IP lawyers that are taking note of the trend -- insurers are as well.

"The malpractice insurance has gone up significantly for IP attorneys in the last 10 years and, certainly, in the last five," said JoAnna Esty, who heads Los Angeles-based Liner Yankelevitz Sunshine & Regenstreif's IP department. "There's a recognition among businesses that if they lose a property right, there is an inquiry into the reasons for the loss and, where appropriate, an attribution of fault and an expectation of redress."

A past chairwoman of the intellectual property law section of the State Bar of California, Esty said premiums for IP lawyers, which used to be lower, are now at the same level as other lawyers. Richard Peterson, a solo patent lawyer in San Francisco and also Esty's husband, used to pay just $2,000 a year five years ago -- now he pays $10,000 a year without any claims having been made against him, she said.

Most firms take special precautions to avoid missing patent application dates because the stakes are so high.

"You have to have a double docket system," said Paul Davis, who heads Heller Ehrman's patent and trademark group. "We also have a top docket person, and we pay them a lot of money."

The case is Vaxiion Therapeutics Inc. v. Foley & Lardner LLP, 877641. "

That title implies the progression of the attorney into debtorhood. However, the story is different here. The case. 

Bell v. Hubbert, 05 Civ. 10456
Decided: December 22, 2006

"In or around November 1992, Bell retained the Defendants' law firm, known as Lester, Hubbert & Gill, P.C. ("LH&G"), to prosecute a cause of action in New York Supreme Court. Defendants' then - law partner, LeRoi Gill ("Gill"), neglected to respond to a summary judgment motion in that matter, and judgment was subsequently entered against Bell on default. Gill failed to advise Bell of the default, instead representing on several occasions between October 1993 and July 1994 that the summary judgment motion was still pending. Bell discovered these misrepresentations in July 1994, and discharged LH&G shortly thereafter.

Following Gill's suspension from the practice of law for three years on October 3, 1996, the Defendants continued to practice under the name of Lester & Hubbert, P.C. ("L&H").

On March 26, 1998, Bell filed an action in New York Supreme Court against Gill, alleging breach of contract, breach of fiduciary duty, fraud and malpractice. On May 24, 2000, Bell was awarded a default judgment in the amount of $138,533.67 against Gill and L&H. No judgment was entered against Hubbert or Lester personally.

Bell discovered in or about July 2000 that neither LH&G nor L&H was incorporated as a professional corporation.

Bell filed an action in New York Supreme Court on July 14, 2000, alleging malpractice and fraud by Hubbert and Lester. Upon the default of Hubbert and Lester, a judgment in the amount of $142,037.23 was filed on October 2, 2001.

Lester filed for bankruptcy on December 12, 2001. By order dated July 9, 2003, the Honorable Novalyn L. Winfield of the United States Bankruptcy Court for the District of New Jersey held that the judgment of $142,037.23 was non-dischargeable debt pursuant to 11 U.S.C. §523(a)(2). On or about July 23, 2003, Lester moved to voluntarily dismiss his bankruptcy petition.

By order to show cause filed in the New York Supreme Court, Lester succeeded in having the $142,037.23 judgment opened. The underlying action against Hubbert and Lester, originally filed on July 14, 2000, was dismissed as time-barred by opinion of the Honorable Richard F. Braun of the New York Supreme Court. Bell v. Hubbert, No. 115509/00 (N.Y. Sup. Ct. Nov. 3, 2004).

Although this Court generally permits amendment of a fee-paid action to cure any defects before dismissing the case, Hughes v. Albany, 76 F.3d 53 (2d Cir. 1996), there is no need to do so here as Bell presents no arguably meritorious issue. See Mallard v. United States Dist. Court, 490 U.S. 296, 307-08 (1989) ("Section 1915 . . . authorizes courts to dismiss a 'frivolous or malicious' action, but there is little doubt they would have power to do so even in the absence of this statutory provision."); cf. Pillay v. Immigration & Naturalization Serv., 45 F.3d 14, 17 (2d Cir. 1995) (per curiam) (discussing appellate court's inherent authority to dismiss meritless and/or frivolous fee-paid cases). Repleading would also be inappropriate here in light of Bell's "history of abusing the process of this and other courts by repeatedly filing actions based on the same allegations." Malley v. N.Y.C. Bd. of Educ., No. 94 Civ. 7186 (JFK), 1997 WL 570501 (Sept. 15, 1997) (enjoining plaintiff from filing further complaints in any federal court based on given allegations without prior permission). In addition to filing several state court complaints alleging fraud and malpractice on the part of Defendants, Bell has been a frequent litigant in this District. In the last three years, he has filed at least eleven complaints, many involving similar facts and allegations. See Bell v. Schaeffer Buick BMW, Inc., No. 03 Civ. 10315 (PKC) (FM) (S.D.N.Y. filed Dec. 31, 2003); Bell v. Classic Chevrolet/Buick and BMW, Inc., No. 04 Civ. 0693 (PKC) (S.D.N.Y. filed Jan. 29, 2004); Bell v. Zavell, No. 04 Civ. 9733 (RWS) (S.D.N.Y. filed Dec. 10, 2004); Bell v. Gordon, No. 05 Civ. 2163 (NRB) (S.D.N.Y. filed Feb. 4, 2005); Bell v. Stephens, No. 05 Civ. 7182 (LTS) (RLE) (S.D.N.Y. filed Aug. 12, 2005); Bell v. Hubbert, No. 05 Civ. 10456 (RWS) (S.D.N.Y. filed Dec. 13, 2005); Bell v. Gotham Process Service, Inc., No. 06 Civ. 0470 (JGK) (S.D.N.Y. filed Jan. 23, 2006); Bell v. South Bay European Corp., No. 06 Civ. 0472 (PKC) (GWG) (S.D.N.Y. filed Jan. 23, 2006); Bell v. Manhattan Motorcars, Inc., No. 06 Civ. 4972 (GBD) (S.D.N.Y. filed June 28, 2006); Bell v. Carlsen Motor Cars, Inc., No. 06 Civ. 4974 (LBS) (DFE) (S.D.N.Y. filed June 28, 2006); Bell v. Brace Engineering and Investment Corp., No. 06 Civ. 5742 (KMK) (S.D.N.Y. filed July 28, 2006).

For the reasons stated above, Lester's motion is granted and the Complaint is dismissed with prejudice as to both Defendants.

It is so ordered. "

Easily the winner in the most tangential legal malpracticeblog blurb, here is the story of a hollywood screenwriter, "The Hitcher", and legal malpractice. 

"The Weekly's Paul Cullum described the accident as follows:

According to witness statements, [Red's] Jeep struck his car a second time, gradually picking up speed, until it jackknifed the Honda into oncoming traffic ... and suddenly it was going an estimated 35-40 miles per hour the wrong way across Wilshire, witnesses told police. It jumped the curb and obliterated a bus stop, scooping up 26-year-old Santa Monica City College English student David Roos, who was running for the safety of Q's Billiards, located at 11835 Wilshire, immediately behind him. Taking out an outdoor patio of tables and scattering bodies...

Red, who also wrote the scripts for Near Dark and Blue Steel, then emerged from the car: "Still holding his car keys in his left hand, and bleeding from a small cut on his right eyebrow, Red walked a ways from the vehicle, just in time for Cassady Jeremias, one of Kenny Hughes's friends in the car ahead of him, to see him pick up a sharp stick and begin ramming it into his chest. Interviewed recently, she remembers thinking, 'Well, who's this joker—he's not going to kill himself with a stick jabbing himself in the chest?' Undaunted, Red picked up a broken glass off the floor, approximately two inches thick, and slashed once at his neck, cutting it deeply."

Yow! After receiving medical attention, Red was sent to UCLA psychiatric ward and claimed he had a medical condition that caused fainting spells. He spent the next several years in and out of court dealing with civil suits and bankruptcy hearings but not, as he continued to request, a jury trial where he could explain the accident was a byproduct of his fainting. According to Cullum, Red wanted to appeal his way to the U.S. Supreme Court. Meanwhile, the families of his victims tried—and failed—to reopen the criminal case against him and Red sued his own attorneys for legal-malpractice.

But that's all in the past, right? Red's got two scripts in various stages of production (one directed by Speed director Jan de Bont). Roger Moore the Orlando Sentinel's movie blogger, recently called Red "not an utter hack" and says he's "actually looking forward" to the new Hitcher. Ain't It Cool News's Harry Knowles watched the trailer and squealed, "they're definitely blowing shit up real good and given the laxed attitudes about gross stuff that the MPAA currently has, I'm betting the truck ripping scene will be real good."

The end of the relationship can come from any number of reasons, but the end is reached either before or at the end of the underlying litigation.

<strong>Termination by client</strong>

It is the general rule in the United States, and the rule in New York that an attorney's representation of a client may be terminated at any time by the client, either for good cause or for no cause.

Analysis of a client's termination of the attorney's retention [hereinafter "termination"] starts with determination of whether the termination was for good cause or for no cause.

While the difference between "for cause, good cause, or cause" for termination and "no cause" has been endlessly debated, a "for cause" termination may be based upon misconduct which manifestly does not rise to the level of attorney malpractice.

<strong>Where the discharge is for
cause,the attorney has no
right to compensation</strong>

Where the discharge is for cause, the attorney has no right to compensation. This rule exists regardless of the terms of a retainer or other agreement between the attorney and the client. Traditional contract principles are not always applied to govern disputes between attorneys and clients.

Where the discharge is for cause, the attorney has no right to compensation or a retaining lien, regardless of pleading or stated defenses. "This rule is well calculated to promote public confidence in the members of an honorable profession whose relation to their clients is personal and confidential." "An attorney discharged for cause has no right to a fee or a retaining lien."

<strong>Where the discharge is without
cause, the attorney is limited
to recovering in quantum meruit</strong>

"When an attorney is discharged without cause, the attorney is entitled to recover compensation from the client measured by the fair and reasonable value of the services rendered whether that be more or less than the amount provided in the contract or retainer agreement." This rule, set forth by the Court of Appeals exists as a matter of law, whether pled or not, and whether set forth as an affirmative defense or not.

Where the discharge is without cause, the attorney is limited to recovering in quantum meruit the reasonable value of the services rendered. The courts clearly "possess the traditional authority to "supervise the charging of fees for legal services," pursuant to their "inherent and statutory power to regulate the practice of law."

<em>Quantum meruit</em> means "as much as he deserved, and is premised upon the finding of an implied promise to pay as much as he reasonable deserved." If it is determined that the termination was without cause, recovery should be determined to be an amount which "they reasonably deserved."

The Court of Appeals has found that where the discharge is without cause, as a matter of law, the attorney is limited to recovering the reasonable value of the services rendered, in quantum meruit.

"<strong>Cause" is not the
equivalent of "malpractice"</strong>

Good cause for termination is not the same as malpractice. Attorney malpractice, defined as a deviation from good and accepted practice, which proximately damaged the party, in which, but for the negligence of the attorney there would have been a different or better result is not the same as good cause for termination.

<strong>"Termination for cause"</strong> has arisen in many situations in which malpractice was not even discussed, much less claimed. For example, substantial delays in prosecuting the case or failing to bring the action until 2 days before the statute of limitations is sufficient; failure timely to obtain medical records is similarly sufficient .

Failure to retain an expert is similarly sufficient . "Employment [which] contravenes specific legal requirements is sufficient, as is abandonment of a case, ; or a conflict of interest; a refusal personally to try a case ; or a failure to disclose a settlement offer are all these examples misconduct which resulted in termination for cause, with no fee to the attorney. They do not amount to malpractice, however.

Termination for cause threshold lies well below any question of malpractice. As an example, Dagny Management Corp.,supra, is instructive. Friction between the client and the attorney grew over the management of the settlement funds, in which the attorneys frustrated, but did not destroy, the settlement. The Appellate Division determined that the "firm's interference with the client's right to settle constitutes misconduct sufficient to rise to a level warranting discharge for cause and forfeiture of its fee", citing De Luccia v. Village of Monroe, 180 AD2d 897 [3d Dept, 1992]

The difference flows logically from the question of damages is that in malpractice there is a positive claim for damages, over and above fee considerations from attorneys; in the question of termination for cause, there can be but a reduction of the fees paid, but no positive claim for damages. The heightened burden for malpractice logically accompanies the heightened possibility of damages.

Some people defend legal malpractice, and some move to a new meta-level.  Here is the story of a law firm which apparently failed to advise their client to file a WC claim within a year.  When they are sued, do the simply call the carrier and defend?  No,  They get the legislature to pass a special bill which allows the widow to file a late WC claim.  This special litigation ability to file a claim exonerates the law firm.  Amazing!  The article

Unincorporated LLCs and privity in Legal Malpractice.  Its an arcane area of law.  Here is an interesting analysis of a new case.

"New York Suit By LLC Minority Members Against Attorneys Representing Majority Members
Under New York law, a plaintiff may not allege attorney malpractice absent a showing of actual or near privity between the plaintiff and the attorney, with the exception that no showing of privity is required in claims for fraud, collusion, malicious acts, or other special circumstances. In Aranki v. Goldman & Assocs., LLP, 825 N.Y.S.2d 97, 98-99 (N.Y.A.D. 2 Dept. 2006), the minority members of an LLC sued a law firm for legal malpractice, breach of fiduciary duty, fraud, and breach of contract, contending that the law firm knowingly induced or assisted the LLC members who combined held a majority membership interest to breach their fiduciary duties to plaintiffs. A trial court dismissed plaintiffs' claims for breach of fiduciary and legal malpractice.

On appeal, a New York appellate court reversed the dismissal, finding that, with respect to the legal malpractice claim, although the complaint did not plead specific facts indicating “the existence of an attorney-client relationship, privity, or a relationship that otherwise closely resembles privity” between the plaintiffs-minority members of the LLC and the defendant law firm, the complaint sufficiently alleged facts that, if proven, “would show that the defendants colluded with the majority members of [the LLC], inter alia, to freeze the plaintiffs out of [the LLC’s] management and profit sharing and force them to surrender, at a reduced price, their minority membership interest in [the LLC].” The court further found that although the complaint did not plead facts sufficient to show that defendants breached any fiduciary duty owed to plaintiffs, it did sufficiently allege that the law firm defendants aided and abetted a breach of fiduciary duty by the LLC’s majority members.

Here is an interesting series of legal malpractice articles which you might wish to read.

Here is anarticle which discusses a class action against a Florida law firm for overbiling on contingent fees.  This is usually a tough thing to do.

"A Tampa law firm that has garnered millions of dollars in neglect and abuse settlements and lawsuits against nursing homes in Florida and around the country is now on the defense end of a suit that contends the firm knowingly violated Tennessee law regarding contingency fees.

The lawsuit against the firm, Wilkes & McHugh, was filed in December in U.S. District Court in the Western District of Tennessee.

Plaintiff Debbie Howard hired the firm several years ago to sue a Memphis nursing home in the death of her grandmother for medical negligence, according to the 38-page complaint.

The class-action claim states Wilkes & McHugh engaged in an unlawful scheme to collect 40 percent or 45 percent in contingency fees of settlement amounts, although Tennessee law caps fees to 33 and 1/3 percent in medical malpractice cases. The complaint says the law firm charged the higher and unlawful contingency fee to hundreds of clients in Tennessee.

Here is a New York Law Journal article on application of the New Rules on Depositions. 

"Most practicing attorneys in New York have experienced obstructive behavior from their adversaries during a deposition. Obstructive behavior can take the form of directing the witness not to answer or of speaking objections, where the attorney infers or influences the desired answer from his or her client.

This type of conduct threatens an attorney's ability to take a thorough deposition and is quite often dealt with by calling judges in their chambers or motions to compel an answer resulting in further deposition and an unnecessary expenditure of resources.

The New Rule

As a result of this abusive practice, a new Part 221 of the Uniform Rules for Trial Courts was authored and took effect on Oct. 6, 2006. The new rule reads as follows:

PART 221. UNIFORM RULES FOR THE CONDUCT OF DEPOSITIONS

§221.1 Objections at Depositions

(a) Objections in general. No objections shall be made at a deposition except those which, pursuant to subdivision (b), (c) or (d) of Rule 3115 of the Civil Practice Law and Rules, would be waived if not interposed, and except in compliance with subdivision (e) of such rule. All objections made at a deposition shall be noted by the officer before whom the deposition is taken, and the answer shall be given and the deposition shall proceed subject to the objections and to the right of a person to apply for appropriate relief pursuant to Article 31 of the CPLR.

(b) Speaker objections restricted. Every objection raised during a deposition shall be stated succinctly and framed so as not to suggest an answer to the deponent and, at the request of the questioning attorney, shall include a clear statement as to any defect in form or other basis of error or irregularity. Except to the extent permitted by CPLR Rule 3115 or by this rule, during the course of the examination persons in attendance shall not make statements or comments that interfere with the questioning.

§221.2 Refusal to answer when objection is made

A deponent shall answer all questions at a deposition, except (i) to preserve a privilege or right of confidentiality, (ii) to enforce a limitation set forth in an order of a court, or (iii) when the question is plainly improper and would, if answered, cause significant prejudice to any person. An attorney shall not direct a deponent not to answer except as provided in CPLR Rule 3115 or this subdivision. Any refusal to answer or direction not to answer shall be accompanied by a succinct and clear statement of the basis therefore. If the deponent does not answer a question, the examining party shall have the right to complete the remainder of the deposition.

§221.3 Communication with the deponent

An attorney shall not interrupt the deposition for the purpose of communicating with the deponent unless all parties consent or the communication is made for the purpose of determining whether the question should not be answered on the grounds set forth in §221.2 of these rules and, in such event, the reason for the communication shall be stated for the record succinctly and clearly.

Old Law

Obstreperous conduct has never been permitted at a deposition. Courts have long held that the proper procedure during the course of an examination before trial is to permit the witness to answer all questions posed, subject to objections pursuant to subdivisions b, c and d of CPLR Rule 3115, unless a question clearly violates of the witness's constitutional rights or of some privilege recognized in law, or is palpably irrelevant. See O'Neill v. Ho, 28 AD3d 626, 814 NYS2d 202 (2d Dept. 2006); Mora v. St. Vincent's Hospital, 8 Misc3d 868, 800 NYS2d 298 (Sup. Ct. N.Y. Co. 2005).

Interpretation of New Rules

As stated by §221, no objections are permitted at depositions now except for those made under CPLR Rules 3115(b), (c), or (d). Objections under CPLR Rule 3115(b) pertain to the form of the question. Such an objection should be made contemporaneously with the question otherwise it will be deemed waived. The deposing attorney has an opportunity to rephrase the question or allow the witness to answer it, thus risking the granting of the objection and the striking of any testimony that resulted from an improperly phrased question. Part 221 removes certain discretion previously reserved to lawyers under the CPLR. CPLR Rules 3113(b) and 3115(a) allow the lawyer to interpose all objections at the deposition, but does not require it. Section 221.1(a) now prevents a lawyer from asserting an objection at a deposition unless it would be waived at trial under CPLR Rules 3115(b), (c) or (d). In other words, this subsection confines the type of objections that can be made under the CPLR.

CPLR Rule 3115 (c), deals with objecting to the qualification of the person taking the deposition. CPLR Rule 3115(d) addresses objecting to the competency of the witness or admissibility of testimony and provides that objections regarding the same are not waived by failure to object "unless the ground of the objection is one which might have been obviated or removed if objection had been made at that time."

Section 221.1(b) specifically precludes an attorney from making a speaking objection and suggesting an answer to the deponent. An attorney is required to make a succinct statement as to the objection and include a clear statement as to any defects with the questions. Before enactment of this rule, it was common practice for attorneys defending depositions to include colloquies with their objections in an attempt to influence the deponents answer. Section 221.1(b), by design, is drafted to prevent these types of interference. Now that the rule is in place, it will be up to the courts to enforce §221.1(b) and it will be interesting to see how the judiciary handles violations of this new provision. A strict interpretation of this provision will require many practicing attorneys to adapt their approach in defending a deposition.

Section 221.3 prohibits an attorney from interrupting the deposition to communicate with a deponent unless all parties consent or the communication is made to determine whether the question should or should not be answered under §221.2. Once again, it will be up to the courts to set the tone and effectiveness of this provision, especially because the type of behavior precluded in §221.3 is occurred more than it should before the enactment of Part 221.

Part 221 is an attempt by the Judiciary Committee to take the body of already established law and state it in one clear and unambiguous document to make the practice of taking and defending depositions uniform across the state and generally more productive. However, even with Part 221, there is potential for confusion.

Section 221.2 prohibits an attorney from directing a deponent from answering a question unless to the extent permitted by CPLR Rule 3115 or §221.2. Section 221.2 allows an attorney to direct a deponent not to answer a question under the limited circumstances: "(i) to preserve a privilege or right of confidentiality, (ii) to enforce a limitation set forth in an order of the court, or (iii) when the question is plainly improper and would, if answered, cause significant prejudice to any person.

The last part of this section leaves room for infinite interpretation. What is "plainly improper" and what does it mean if a question is answered, it would "cause significant prejudice to any person"? All examiners in an adversarial process try to illicit information that would cause significant prejudice to their opponent.

Application of New Rules

Nassau County Supreme Court Justice William R. LaMarca, in an unpublished decision dated Oct. 19, 2006, held that under the new §221, a line of questions regarding whether a plaintiff in a trip-and-fall accident had previously been treated for alcohol abuse was improper and plaintiff's counsel was justified in directing the plaintiff not to answer these questions at the deposition. Alma v. JSC Pizzeria Corp. (Sup. Ct. Nassau County 2006, Index No. 14382/04). According to Justice LaMarca, because there was no indication that the plaintiff had consumed any alcohol for 48 hours prior to the accident, the questions were improper and otherwise protected by the physician-patient privilege.

In Adams v. Rizzo, 13 Misc3d 1235(A), 2006 WL 3298303 (Sup. Ct. Onondaga County, Nov. 13, 2006), the court directed plaintiff's counsel to pay for all costs associated with a further deposition due to his abusive conduct and §221 violations at an initial deposition of the plaintiff. In Adams, the plaintiff's attorney regularly instructed his witness not to answer questions and added insulting phrases such as, "Don't answer questions about your background other than your three kids. Just because he asks a question, trust me, especially this lawyer, doesn't mean it's a proper question." Ms. Adams is the mother of three children who allegedly were injured by exposure to lead-based paint. Ms. Adams was not a direct plaintiff, rather the representative of the children. Id. Examination regarding her background was nonetheless deemed proper and considered an abuse by plaintiff's counsel to direct the deponent not to respond.

As evinced by Adams and Alma, what is or is not a proper line of questioning under §221.2(iii), is still open to broad interpretation and may continue to lead to abuses by attorneys. The penalty for obstructive behavior at a deposition is also discretionary.

Striking a pleading, the most drastic penalty, and perhaps the best way to prevent obstructionist behavior is not available. O'Neill v. Ho, 28 AD3d 626, 814 NYS2d 202, (2d Dept. 2006) (holding that striking a pleading is too harsh a penalty for obstreperous conduct at a single deposition session). The Appellate Division, Second Department in O'Neill ordered the defendant to pay $1,500 to compensate the plaintiffs' counsel for the time expended and costs incurred in connection with the aborted deposition session. In Adams, the court, similarly ordered plaintiffs' counsel to pay all costs associated with a further deposition of including the cost of the stenographer.

Conclusion

Part 221 pertaining to the conduct of attorneys at depositions is an idealistic approach to address recurring problems. However, it is up to the New York state courts to give it "teeth." From a practical standpoint, the obstructive behavior of attorneys will not change unless the courts enforce the rules as is typically done in federal court. If the courts do not take a hard line in enforcing Part 221, nothing will change and abusive tactics will continue prevail over the concept of open discovery in the state court deposition arena. "

Living in NYC, we forget that in other places, where people live on plots of land, adverse possession is a significant area of litigation.  Here is a short blog blurb concerning how to handle an adverse possession situation.  This attorney has had 50 cases!

"As a trial lawyer, I've probably had 50 adverse possession cases, on one side or the other. I also used to teach real estate finance and every few years one of my students would enhance their property holdings by adversely possessing someone else's property. The adverse possession rules are worth knowing for any serious real estate investor.

This is also a big area for legal malpractice since so many lawyers tend to do the absolute wrong thing when consulted by a client complaining of a neighbor encroaching on their property.

As the name implies, one of the things a trespasser has to show in order to acquire title by means of adverse possession is that his occupancy was adverse to that of the titled owner.

All too often, when a landowner complains to his lawyer that someone is trespassing on his property, the lawyer writes a letter telling the trespasser to get off the property or a suit will be filed. This is the wrong thing to do, as it merely helps the trespasser in establishing the required "adversity."

What the lawyer (or landowner) should do is send the trespasser a letter thanking him for taking care of the property and advising that the license to use the property is henceforth revoked (or demand payment of rent if the trespasser wishes to continue staying where he is). If done properly, such a letter is quite helpful in destroying that required element of "adversity," thereby saving the landowner's property.

There are some exceptions to the adverse possession rules. You can't adversely possess against public lands or land owned by a government or against certain public utilities. :   The blog blurb

"Suit blames Brasota ,Florida lawyer "Legal malpractice" alleged, but lawyer in question says he did nothing wrong and can prove it.

The first lawyer on the scene at Brasota Mortgage overlooked conflicts of interest and his own lack of expertise so he could turn the tangled Bradenton company into a cash cow, Brasota's court-appointed trustee alleged in a lawsuit this week. "

The entire article.

Anthony Lin of the NYLJ writes:

"The former partners of defunct New York law firm Hall Dickler are facing a legal malpractice suit for failing to advise a company to file for bankruptcy earlier than it did.

The creditors' committee of VWE Group, a Yonkers-based distributor of corporate greeting cards and human resources forms that filed for Chapter 11 protection in 2004, claims the lawyers advised the company to undertake a series of transactions in 2002 and 2003 that deprived the bankruptcy estate of $4.2 million.

John R. Sachs of Epstein, Becker & Green, who represents the Hall Dickler defendants, said the case could allow a federal court to consider the question of whether lawyers can be held liable for advising on transactions that worsen a bankruptcy situation. The Delaware Chancery Court last year ruled there was no cause of action for "deepening insolvency."

Southern District Judge Colleen McMahon last week withdrew the case from bankruptcy court on the grounds that the malpractice claims were not "core" to the Chapter 11 proceeding. The creditors had sought to keep the matter before Southern District Bankruptcy Judge Adlai S. Hardin"

MP3, which is a service allowing one to download music from one's own CDs, is in hot water and litigation over its service.  Now, this story tells us that they have sued their attorneys for not explaining "fair use" to them.

Here is an interesting story.  Plaintiff successfully sues her attorney for $6.4 million.  Now she sues his father for fraud.  The Story: 

"CLEVELAND

Coffee firm owner sues

A year ago, Angela Caruso of Brecksville won a $6.4 million legal malpractice verdict against her former lawyer, David Leneghan, in Cuyahoga County Common Pleas Court. Now she's pressing a civil fraud lawsuit against Leneghan's father, Patrick, whom she accuses of conspiring with his son to steal her coffee company, Berardi's Fresh Roast. In opening statements Wednesday, attorney William Wuliger said the Leneghans duped his client into selling the business to Patrick Leneghan for half its value. Defense lawyer David Bertsch told the jury Caruso was too savvy to be tricked, and accused her of scheming to boost her family's new business, Caruso Coffee.

Sometimes its a lowly plaintiff, sometimes a big corporation and on ocassion, a city.  Here is a completely mixed up report of a city suing its attorneys in legal malpractice. Its in  Coatsville. 

"Council member Kurt Schenk and president Patsy Ray lashed out at media coverage of Coatesville at Monday night's meeting. 

"In other council action, members approved hiring special counsel in the city's lawsuit in Federal District Court against Siana, Bellwoar, and McAndrew for legal malpractice and related claims.
Siana, Bellwoar, and McAndrew was hired as special counsel at the city's reorganization meeting in 2006. At that time, city solicitor Andrew Lehr was hired to replace John Carnes who was fired by council prior to Lehr's selection.
Siana, Bellwoar, and McAndrew represented the city in labor and land acquisition matters for approximately six months. In addition, the firm specializes in municipal law.
They were terminated in a council action and subsequently, in October 2006,
Siana, Bellwoar, and McAndrew filed suit against the city, four members of council and the city solicitor.
The Chester Springs-based law firm accused the city of legal malpractice, breach of fiduciary duty, malicious prosecution and violations of the rules of professional responsibility by lawyers in the Siana law firm over the course of the firm's representation in Coatesville.
Those allegations were answered last Friday in a filing by defense counsel Anne Myers, of the Philadelphia law firm of Marks, O'Neill, O'Brien and Courtney.
Monday night, council approved city manager Harry Walker and Lehr obtaining the services of a special counsel in the city's defense. Council will take action on that selection at their next meeting. Eggleston voted no on the action. Council member Ed Simpson was absent from the meeting.

Malpractice is a professional's failure to use minimally adequate levels of care, skill or diligence in the performance of the professional's duties, causing harm to another. In New York, attorney malpractice is defined as a "deviation from good and accepted legal practice, where the client has been proximately damaged by that deviation, but for which, there would have been a different, better or more positive outcome."

Malpractice typically occurs when a professional fails to exercise his or her professional skills in an assignment at the necessary standard of care, skill and learning applied under the circumstances by the average prudent reputable member of the profession in the "community". The analysis is based upon the standard of care for the professional in the community" what other professionals in the same field do for their clients who are located in the same geographic area. In New York, courts will hold all attorneys to the same standard of professional performance.

The first necessary element is a professional relationship. In order to sue for professional malpractice, the plaintiff must have retained the attorney. There must of course be a relationship in privity, between the professional and the plaintiff such that the professional owes the plaintiff a duty. In attorney malpractice either a written retainer, proof that the attorney engaged in work or proof that the attorney appeared for the client is necessary. While in litigation often there is clear proof of representation; in transactional settings, representation may be less clear. Proof to a jury's satisfaction of actual representation must be demonstrated. This proof may come from the correspondence of the professional, from papers authored by the attorney or from litigation documents.

Here is a case from Kings which illustrates difficulties in proving that the first attorney was terminated for cause.  Often the client is so fixated on getting the case to the new attorney, that promises are made, and proper evidence is not prepared.

Vallejo v. Builders for the Family Youth, 5538/00
Decided: January 2, 2007

NEW YORK COUNTY
Supreme Court

Incoming Attorney: Proner and Proner

Tobi Salottolo, Esq.

Outgoing Attorney: William J. Bendix, Esq.

Justice Schack
Click here to see Judicial Profile

This decision and order resolves a fee dispute in this matter between William J. Bendix, Esq., ("Bendix"), the outgoing counsel for plaintiffs Maria Vallejo, Carmen Reina and Maya Reina, and Proner and Proner, P.C. ("Proner"), the incoming counsel for the same plaintiffs. Proner moved by order to show cause to vacate any liens for attorneys' fees in this action claimed by Bendix. Bendix opposed the order to show cause, claiming that he is owed one-half of the attorneys' fees in this matter. The parties changed counsel from Bendix to Proner in May 2002.

This case was assigned to me on September 12, 2005 for a jury trial, after the jury had been selected. Three plaintiffs then remained in the action, Maria Vallejo, Carmen Reina (who reached the age of majority prior to trial) and Mayra Reina. Most of the defendants had been previously dismissed from the action. After extensive discussions and negotiations with plaintiffs' counsel, Mitchell Proner, Esq., and respective counsels for the remaining defendants, the matter was settled on September 13, 2005, with a stipulation of settlement placed on the record for a total package of $920,000.00 ($75,000.00 for Maria Vallejo, $405,000.00 for Carmen Reina, and $440,000.00 for Mayra Reina).

At issue between Proner and Bendix is the appropriate fee, if any, for Bendix. Proner contended that plaintiffs discharged Bendix for cause and thus Bendix is not entitled to any legal fees. Bendix claimed that he is entitled to a percentage of the legal fees for his work performed prior to his 2002 discharge. In my June 20, 2006 decision and order in this fee dispute, 12 Misc3d 1171 (A), 2206 NY Slip Op 51140 (U), I ordered a hearing to determine if Bendix was discharged with or without cause, and if Bendix was discharged without cause to determine the amount of legal fees owed to Bendix.

Background

This personal injury action was the result of a May 9, 1999-motor vehicle accident. Proner's affirmation in support of the order to show cause that resulted in my June 20, 2006 decision and its attached affidavits alleged that Bendix mishandled the case and the related no-fault claims of Mayra Reina. The plaintiffs' affidavits in support of the order to show cause [exhibits D and G of the order to show cause] were all prepared subsequent to the September 13, 2005 settlement by stipulation and all sworn to on October 18, 2005, before the same notary public. The affidavits of Carmen Reina and Mayra Reina are almost identical. Both claimed that Bendix delayed depositions and never called them about the progress of the case. All three of these affidavits, dated about three and one-half years after Bendix's discharge, state: "I discharged 'WILLIAM BENDIX' because I felt he did not provide me with proper representation in this action." Further, all three affidavits concluded with the identical assertion that "[b]ecause of his [Bendix] poor representation of us in this case, I do not think that he should be entitled to any of the legal fees in this case."

The Proner supporting papers spoke glowingly of Proner's work. Bendix, in paragraph 3 of his affirmation in opposition to the order to show cause stated that Proner's application "to vacate your affirmant's lien is a layer cake of misinformation laid upon fabrication intended to deny your affirmant his rightful share of the legal fee in this matter." Proner failed to provide this Court with any documents from plaintiffs to Bendix, stating that Bendix was discharged for cause. The only documentation presented with respect to Bendix being discharged for cause are the October 18, 2005 affidavits, three and one-half years after plaintiffs discharged Bendix.

Exhibit E of the order to show cause presented various documents connected to the 2002 substitution of counsel. Attached to exhibit E are: copies of the April 30, 2002 retainer agreements by plaintiffs with Proner; copies of plaintiffs' May 1, 2002 consents to change their attorney to Proner from Bendix; copies of May 1, 2002 letters from plaintiffs to Bendix, advising Bendix of the change of counsel to Proner, and requesting Bendix to transmit "information and documents" to Proner; and, the May 1, 2002 cover letter from Mitchell Proner to William Bendix, advising Bendix of the counsel change and the transmittal of the above-mentioned documents. Mitchell Proner, in his May 1, 2002 cover letter to William Bendix states, "[i]f you would like to discuss your disbursements and/or liens, please contact the undersigned upon receipt of this letter [emphasis added]."

Proner subsequently had problems in getting the file from Bendix. Proner submitted an order to show cause with respect to the file transfer issues, to Justice Hutcherson, who signed it on May 17, 2002, returnable on June 5, 2002. Jennifer Bailine, Esq., an associate of Proner, not only prepared the 2006 order to show cause and affirmation in support, but also prepared the May 17, 2002 order to show cause and its affirmation in support. It is interesting to note that Ms. Bailine in the 2006 order to show cause affirmation in support moved to vacate any Bendix lien, while in her May 13, 2002 affirmation in support she stated, "[o]ur office has communicated to the outgoing attorney that we would acknowledge its lien and attorneys fees to be resolved at the conclusion of the case [emphasis added]." Justice Hutcherson, in his June 5, 2002 order, instructed that "liens and Bendix's attorneys fees to be resolved . . . by stipulation or court."

This Court conducted a hearing on August 18, 2006 to determine if Bendix has a lien on attorneys' fees or not. At the conclusion of the hearing, the Court reserved decision to review the hearing transcript and the Kings County Clerk's files in the instant matter.

Discussion

The Court makes the following findings. In Cohen v. Grainger, Tesoriero & Bell, 81 NY2d 655, 658 (1993), the Court of Appeals instructed that "[i]t is settled that a client may discharge an attorney at any time, with or without cause (Lai Ling Cheng v. Modansky Leasing Co., 73 NY2d 454, 457; Matter of Montgomery, 272 NY 232)." See Teichner by Teichner v. W & J Holsteins, Inc., 64 NY2d 977, 979 (1985); Campagnola v. Mulholland, Minion & Roe, 76 NY2d 38 (1990); Matter of Leopold, 244 AD2d 411 (2d Dept 1997); Papadopoulos v. Goldstein, Goldstein & Rikon, P.C., 283 AD2d 649 (2d Dept 2001); Byrne v. Leblond, 25 AD3d 640 (2d Dept 2006).

If an attorney is discharged for cause, the attorney is not entitled to any fee, notwithstanding a specific retainer agreement. Teichner by Teichner v. W & J Holsteins, Inc., supra at 979; Campagnola v. Mulholland, Minion & Roe, supra at 44; Byrne v. Leblond, supra at 641. When an attorney is discharged without cause, the attorney is entitled to compensation based upon quantum meruit. Reubenbaum v. B. & H.Exp., 6 AD2d 47, 48 (1st Dept 1958); Teichner by Teichner v. W & J Holsteins, Inc., supra at 979; Cohen v. Grainger, Tesoriero & Bell, supra at 658; Matter of Leopold, supra at 411; Papadopoulos v. Goldstein, Goldstein & Rikon, P.C., supra at 649; Byrne v. Leblond, supra at 641.

However, when the dispute is between attorneys, as in the instant matter, the Court in Cohen v. Grainger, Tesoriero & Bell, supra at 658, observed that:

the rules are somewhat different. The discharged attorney may elect to receive compensation immediately based on quantum meruit or on a contingent percentage fee based on his or her proportionate share of the work performed on the whole case (Cheng, supra, at 458 [citations omitted]).

Earlier this year, in Byrne v. Leblond, supra at 642, the Appellate Division, Second Department, instructed that:

the Supreme Court should have determined the amount of the contingency fee based upon the proportionate share of the work performed by the Rovegno firm [the outgoing firm] on the whole case taking into consideration the relative contributions of the lawyers thereto (see Lai Ling Cheng v. Modansky Leasing Co., supra at 458-459; Jones v. Birnie Bus Serv., Inc., 15 AD3d 951 [2005]; Smerda v. City of New York, 7 AD3d 511 [2000]). [Emphasis added]

In the instant case, with conflicting claims as to whether or not Bendix was discharged for cause, a hearing was necessary to resolve the fee dispute. Hawkins by Hawkins v. Lenox Hill Hosp., 138 AD2d 572 (2d Dept 1988); Klein v. Eubank, 87 NY2d 459 (1996); Byrne v. Leblond, supra at 642. Prior to the hearing, the Court had no evidence, other than plaintiffs' October 18, 2005 affidavits, that Bendix may have been discharged for cause. In Klein v. Eubank, supra at 463, the Court noted that:

Attorney-client relationships frequently end because of personality conflicts, misunderstandings or differences of opinion having nothing to do with any impropriety by either the client or the lawyer. Others end because of unexpected conflicts of interests or changes in litigation strategy that require different lawyering skills. In some of those situations, the client may ask the attorney to withdraw. In others, it may be the attorney who initiates the termination process by offering to withdraw in order to avoid embarrassment, avert further conflict, preserve the relationship on a long-term basis or simplysave the client from the discomfort of having to fire the attorney. Importantly, in many such cases, the decision to terminate the relationship is the product of a mutual choice.

Thus, a hearing was necessary to determine the facts and circumstances relating to Bendix's 2002 discharge. If Bendix was discharged without cause he is entitled to a portion of the attorneys' fees in the instant matter, based upon either quantum meruit or a percentage of the contingency fee earned for his "proportionate share of the work performed." Lai Ling Cheng v. Modansky Leasing Co., supra at 458; Cohen v. Grainger, Tesoriero & Bell, supra at 658; Klein v. Eubank, supra at 464; Byrne v. Leblond, supra at 642. Further, this Court takes judicial notice of Justice Hutcherson's June 5, 2002 order, which stated that Bendix's "fees to be resolved . . . by stipulation or court."

Proner's counsel, at the August 18, 2006 hearing, informed the Court, "Your Honor, I'm willing to stipulate that the initial letter sent to him [Bendix] discharging him, did not say for cause." (tr., p. 4, lines 17 - 19). Proner's counsel then called plaintiff Mayra Reina to testify (tr., pp. 7 - 18). Ms Reina testified about her dissatisfaction with Bendix's representation and her satisfaction with the work performed by Proner. At the conclusion of Ms. Reina's testimony, I asked a question to clarify an issue [tr., p. 18, lines 10 - 19]:

THE COURT: I want to ask Ms. Reina a question. When you changed lawyers, going back a little more than three years, April, May of 2003 [actually 2002], you signed some documents, am I correct, for Mr. Proner?

THE WITNESS [Ms. Reina]: Yes.

THE COURT: Did you send any kind of communication to Mr. Bendix, giving a reason why he was discharged as your lawyer?

THE WITNESS [Ms. Reina]: No.

THE COURT: Thank you.

Proner's counsel had no other witnesses to call. Bendix called Anthony Iadevaia, Esq., a personal injury lawyer with fifteen years experience (tr., p. 26), to testify. Mr. Iadevaia represented John Vallejo, Sr. , the last named plaintiff in the caption, who settled his case separately, just prior to trial. He testified that delays in trying the case were due to the dilatory tactics of defendant City of New York. The City was ultimately let out of the case. The following colloquy took place at tr., p. 21, lines 6 - 25.

THE WITNESS [Mr. Iadevaia]: That was the reason that there were so many adjournments with the depositions, because the City witnesses were not ready. The City attorneys were not ready. I went through the same frustrations [to Bendix] as you did on that particular matter.

THE COURT: This is your client, Mr. Vallejo; you were ready to have him deposed, your would get a call from the Corp. Counsel, "I need a delay?"

THE WITNESS [Mr. Iadevaia]: That's correct, because the City was a party to the action, Judge. As you might be aware, the PC [preliminary conference order] says the EBT's have to be done in their office [New York City Corporation Counsel] which is on Jay Street [across the street from Kings County Supreme Court].

THE COURT: You had to deal with Mr. Kalish [former head of the Corporation Counsel's Torts Division in Kings Count], now Judge Kalish?

THE WITNESS [Mr. Iadevaia]: Now Judge Kalish.

Because there were so many plaintiffs, there was always a question of the City being ready.

I recall Mr. Bendix and I were ready pretty much every time, other than the City kind of throwing a thorn into things.

Mr. Iadevaia testified that after Proner replaced Bendix the case continued to drag on due to both the City's delays and needless motion practice by Proner (tr., pp. 22 - 23). On cross-examination, Mr. Iadevaia testified that he never heard complaints from Mr. Vallejo, his client, about concerns of his stepdaughter, Mayra Reina about Bendix's representation of the plaintiffs (tr., p. 32).

In his closing arguments (tr., p 34 - 35), Bendix referred to his affirmation in opposition and supplemental affirmation in opposition to the order to show cause, to demonstrate that he prepared bills of particular, secured medical authorizations, and made attempts to have his clients deposed. He stated at tr., p. 35, lines 19 -20, "I didn't do anything wrong. The case was delayed because the City was involved." Bendix, at tr., p. 35, line 21 - p. 36, line 4, stated:

I feel I'm entitled to 50 percent of the legal fee. I did 50 percent of the work here. I brought the case to suit, did the BP's [bills of particulars], put the case on for the PC conference. Referral gets one-third. I'm way beyond the one-third in this case, Your Honor. I think they should be entitled to something too. I don't think I should be shafted here because they now at the end of the case come with the idea that they should have 100 percent of the legal fee.

In her closing arguments, Proner's counsel (tr. pp. 36 -37) admitted that Bendix "put in the suit" (tr., p. 36, line 10). However, she argued that when Proner got the file, the plaintiffs still were not ready to be deposed. Further, Proner had to get medical and hospital records, prepare amended and supplemental bills of particulars, attend a preliminary conference, prepare and take depositions, and prepare for trial.

After reviewing the transcript of the August 18, 2006 hearing, and the official files for this case maintained by the Kings County Clerk, the Court makes the following findings of fact and conclusions of law. Both Ms. Reina and Mr. Iadevaia were credible witnesses. Proner's counsel conceded that the letters sent by the three plaintiffs to Bendix about his discharge never mentioned cause. Further, Ms. Reina admitted that Bendix was never given a reason for his discharge. Several weeks after Bendix's discharge, Ms. Bailine of Proner's office acknowledged in her May 13, 2002 affirmation in support of an order to show cause that the Bendix lien was "to be resolved at the conclusion of the case." In his June 5, 2002 order, Justice Hutcherson instructed that ""liens and Bendix's attorneys fees to be resolved . . . by stipulation or court." Therefore, Bendix was never discharged for cause.

The Court of Appeals noted, in Cohen v. Grainger, Tesoriero & Bell, supra at 658, that "[t]he discharged attorney may elect to receive compensation immediately based on quantum meruit or on a contingent percentage fee based on his or her proportionate share of the work performed on the whole case." The Appellate Division, Second Department, in Byrne v. Leblond, supra at 642, instructed that in determining the amount of the contingency fee earned by the outgoing firm, the trial court has to take into account the "proportionate share of the work performed . . . on the whole case taking into consideration the relative contributions of the lawyers thereto."

Bendix must be given credit for initiating the lawsuit and keeping it alive for three years. He prepared the summons and complaint, medical authorizations, bills of particulars, attended General Municipal Law §50 (h) hearings with the City, and conducted numerous other tasks necessary to prosecute the case. After, the plaintiffs exercised their right to change counsel to Proner, Proner must be given credit for continuing the case, preparing many amended and supplemental documents, preparing and attending depositions, and getting the case ready for trial. Without the efforts of the Proner firm, the plaintiffs would not have secured a total settlement package of $920,000. Therefore, in analyzing the " proportionate share of the work performed" and "the relative contributions of the lawyers," the Court finds that Bendix is entitled to forty (40 percent) percent of the legal fees in the instant action and Proner is entitled to sixty (60 percent) percent of the legal fees in the instant action.

Conclusion

Accordingly, it is

ORDERED, that William J. Bendix, Esq., serve a notice of entry of this order and decision upon the law firm of Proner and Proner, P.C., together with a detailed accounting of his costs and disbursements in this matter; and it is further

ORDERED, that within 14 days after receiving the notice of entry of this order and decision, and the detailed accounting of Mr. Bendix's costs and disbursements, Proner and Proner, P.C. shall, after deducting Mr. Bendix's costs and disbursements and Proner and Proners' costs and disbursements, transmit to William J. Bendix, Esq., a check for his costs and disbursements in the instant action, and forty (40 percent) percent of the net proceeds for legal fees from the $920,000.00 settlement in the instant action, and retain sixty (60 percent) percent of the net proceeds from the $920,000.00 settlement in the instant action.

This constitutes the decision and order of this court.

Supreme CourtJusticeSchack

Sexter & Warmflash was fired by its client, who then sent it an angry letter.  That letter brought  a defamation case.  It survived summary judgment, but the Appellate Division today reversed and dismissed.  Reason?  As Anthony Lin of the NYLJ reports, it was qualified privilege.

"A Manhattan appellate court has thrown out a law firm's defamation suit against a former client whose husband wrote a letter and copied to others questioning the competence and honesty of lawyers at the firm.

New York firm Sexter & Warmflash was hired by Elizabeth Margrabe in 2001 to represent her and her brother, Anthony Rusciano, in a Westchester County lawsuit against a cousin to whom the siblings wanted to sell their interests in a family business. The retention agreement provided that the firm would work at a reduced rate until the case was resolved, after which it would be entitled to a 50 percent premium over its total bill"

"Manhattan Supreme Court Justice Shirley Werner Kornreich (See Profile) denied the Margrabes' motion to dismiss and granted summary judgment to Sexter & Warmflash regarding the Margrabes' liability for the usury allegation. But the Appellate Division, First Department, reversed on the grounds that Mr. Margrabe's letter was absolutely privileged as part of a judicial proceeding and ordered the dismissal of the defamation suit.

Sexter & Warmflash had argued that the privilege did not apply because Mr. Margrabe's letter had discharged the firm from the case and because it had no purpose other than malice.

Privilege Applied

But the appellate court, in a ruling by Justice David Friedman (See Profile), said the letter was sufficiently "pertinent" to the proceeding, noting that only the most outrageous out-of-context statements would have escaped the privilege.

"In this case, the allegedly defamatory statements in the April 9 letter concern, on their face, the quality of S&W's representation of Ms. Margrabe in the Westchester County action and in the negotiations to settle it, and the propriety of S&W's fee arrangement for that representation," Justice Friedman wrote in Sexter & Warmflash v. Margrabe, 107569/04. "The statements were made in a letter that, besides being sent to S&W itself, was directed solely to parties legitimately involved in the proceeding with which the letter was concerned."